Glossary
Safe harbor
A payment level that protects you from an underpayment penalty even if you end up owing more.
The IRS will not charge an underpayment penalty if payments across the year reach one of the safe-harbor levels: generally 90% of the current year's tax, or 100% of the prior year's total tax — rising to 110% when prior-year adjusted gross income exceeded $150,000. The prior-year route is the practical one for people with unpredictable income, because last year's number is already known. Withholding from a job counts toward the total and is treated as paid evenly through the year.