A certain hypothetical person was self employed in both 2021 and 2022. In 2021 he made four estimated income tax payments of $2000 each. As it turns out, his total income for 2021 was exactly $8000 so he had no adjustment or refund. In 2022, his total income tax liability again was $8000. His plan was to make four estimated income tax payments of $2000 each. Due to over spending he finds it inconvenient to make his estimated tax payment in January.

Assuming he does not make his $2000 quarterly tax payment in January and pays it in April what will the consequence be?

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    Given that any penalty is calculated with IRS Form 2210, your idealized case can be worked out yourself. Is there something about the instructions that aren't clear? Dec 31, 2022 at 12:04
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    Browsers have search/find text function for the visible web page, usually Control-F. The same goes for any PDF reader. For the Form 2210 Instruction page you can search for Penalty Computation and really look at Worksheet for Form 2210, Part III, Section B—Figure the Penalty (Penalty Worksheet) Dec 31, 2022 at 21:03
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    @MorrisonChang+ that page is still the instructions for 2021, as the 2022 update hasn't been published yet, and due to the Fed's recent response to inflation, 'federal short-term rates' will be higher for 2022 than for 2021. However, if your liability is $8000 your required in-year payment is only $7200; if you paid 3x$2000 for the first 3 'quarters' your underpayment is only $1200. If 'in April' means April 15, the penalty will be damn close to 7%*(90/365)*$1200=$20.71. Jan 1, 2023 at 2:49
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    PS: I assume/hope you are considering total liability including SECA, not just income tax liability. Although not actually income tax, SECA is collected from the same payments as income tax and on the same required schedule. Jan 1, 2023 at 2:55
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    @dave_thompson_085 Thanks for the correction. I thought this was simpler but given that inflation has sharply risen in 2022, not realized that penalty rates are set per quarter: federal short-term interest rate plus three percentage points Jan 1, 2023 at 3:44

1 Answer 1


To close this out, the 2022 version of the 2210 instructions is now up at the link given by Morrison Chang, and as expected the rate for 1/15 to 4/15 is 7%.

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