The January 15 estimated tax payment

Updated October 27, 2026 · For the 2026 tax year

January 15, 2027 is the fourth and last estimated tax payment for 2026. For funded traders, it's the last chance to pay tax on this year's prop firm payouts during the year, before the return is due.

Do you need to make it?

Prop firms don't withhold tax from payouts, so the IRS expects estimated payments if you'll owe $1,000 or more when you file, after your withholding. A single $5,000 payout can carry about $1,700 of tax (see the example), so most traders with payouts this year pass that line.

What matters is whether your payments for the year, estimated payments plus any withholding, reach the safe harbor: the smaller of 90% of your 2026 tax or 100% of your 2025 tax (110% if your 2025 AGI was over $150,000, or $75,000 if married filing separately). The quarterly guide explains it in full.

The one way to skip it

You don't have to make the January 15 payment if you file your 2026 return by February 1, 2027 and pay the entire balance with it. For most funded traders that's tight: prop firms have until the end of January to send your 1099-NEC, so the forms may only just have arrived.

Missed earlier payments? Pay now, not in April

If you skipped the earlier 2026 due dates, paying in January still helps. The underpayment penalty is charged on each underpayment for the number of days it stays unpaid, so paying sooner keeps it smaller. If your first payout came late in the year, the annualized income method on Form 2210 can lower or remove the penalty for the earlier quarters. A CPA can run it.

Have a day job? December withholding counts too

Federal tax withheld from your paycheck is treated as paid evenly through the year, no matter when it was withheld. So a new Form W-4 with extra withholding for your last paychecks of 2026 can cover the whole year, including quarters you missed. Payroll changes can take a pay cycle or two, so give your employer the W-4 early in December. Estimated payments only count from the day you make them. More for December: the year-end checklist.

How to pay

• Your IRS Online Account or IRS Direct Pay: free transfers from a bank account. Choose estimated tax (Form 1040-ES) for tax year 2026.
• EFTPS: free, but you have to enroll first, which takes time.
• Debit or credit card, online or by phone, through an IRS-approved processor that charges a fee.
• Check or money order with the Form 1040-ES voucher. The IRS warns that the postmark date is when USPS processes the envelope at a facility, which may be later than the day you drop it in the mailbox, so pay online if you're close to the deadline.

Keep the confirmation. You'll enter all of your 2026 estimated payments, including this one, on your 2026 return. Most states with an income tax have their own estimated payment schedule too; check your state revenue department's site. See also state taxes on payouts.

Get your number

Enter your payouts, trading costs and day job in the free calculator. It shows what's due on January 15 to reach the safe harbor, and the extra W-4 amount per paycheck that would cover it instead. Planning estimates, not tax advice: confirm with a CPA.

Sources

• IRS, 2026 Form 1040-ES: the January 15, 2027 due date and the February 1 exception, the safe-harbor percentages and $150,000 threshold, the penalty for each day an underpayment is unpaid, payment methods and the postmark caution
• IRS, Estimated taxes: the $1,000 rule and paying through withholding
• IRS, Instructions for Form 2210: withholding treated as paid evenly, the annualized income installment method

General information, not tax advice. This guide explains common rules for US funded traders; your situation may differ. It isn't a substitute for a licensed CPA or IRS enrolled agent, so review your own numbers with one before you file or pay.