Overpaid Your Estimated Taxes? Three options for handling this
May 2026 - Estimated tax payments help your company avoid a tax increase. But what should you do if you’ve overpaid?
There are four dates on which you can make an advance payment: April 10, July 10, October 12, and December 21, 2026. These advance payments entitle you to tax reductions of 9%, 7.5%, 6%, and 4.5%, respectively.
A surplus: no small matter
A surplus often arises from an incorrect estimate of profits. Think of a project that falls through, unexpected costs, or tax optimizations that lower the taxable base. The result: you’ve prepaid more than necessary.
However, that money doesn’t just remain available. Without taking the necessary action, you’ll usually only get it back via your tax assessment notice, which may mean you won’t have access to it again for months.
Three options
In that case, you have three options.
You can wait for the tax authorities to automatically adjust and refund the overpayment. That’s simple, but not very beneficial for your company’s cash flow.
A faster option is to request a refund yourself within three months of the end of the fiscal year. In that case, you’ll usually receive the amount within a few weeks.
The third option is often the most strategic: using the surplus for a subsequent prepayment. This way, you avoid having to request a refund first only to deposit the money again later, and you maximize the benefit of early payment (especially in the first quarter).
Please note: any outstanding tax liabilities will be settled first.
Thinking ahead pays off
The right choice depends on your financial situation and planning. That’s why close coordination with your accountant is essential. A timely and realistic profit estimate makes the difference between money that’s tied up and funds that are actively working for you.
