Estimated tax payments for US expats are required when you expect to owe at least $1,000 of US tax for the year after withholding and credits. You pay in four instalments, due 15 April, 15 June, 15 September and 15 January, using Form 1040-ES. Living abroad does not change those dates. You avoid the underpayment penalty by paying 90% of this year's tax or 100% of last year's, rising to 110% for higher earners.
Most Americans working for a UK employer never think about estimated tax, because the foreign tax credit removes their US liability. However, plenty of expats do owe the IRS each year: high earners in Dubai, the self-employed in the UAE, and anyone with US investment income. With no US employer withholding tax for them, the IRS expects payment during the year, not in one sum the following spring. This guide explains who must pay, how much, and how to send money to the IRS from abroad.
Who needs estimated tax payments as a US expat
The general rule comes from Internal Revenue Code section 6654. You must make estimated payments if you expect to owe $1,000 or more when you file, and your withholding and refundable credits will be less than the safe harbour amounts described below. The IRS explains the rule on its Estimated Taxes page.
Expats who usually owe
Several groups regularly have US tax to pay. First, employees in the UAE earning above the Foreign Earned Income Exclusion, which is $132,900 for 2026 (IRS, 2026). The UAE charges no personal income tax, so there is no foreign tax credit to cover the excess. Second, self-employed Americans in the UAE, who owe 15.3% self-employment tax because the US has no Totalization Agreement with the UAE. Third, anyone with significant investment income subject to the 3.8% Net Investment Income Tax, which foreign tax credits cannot offset. Finally, expats with US rental or business income.
Expats who usually do not
In contrast, a US citizen employed in the UK normally owes nothing. UK Income Tax exceeds US tax on the same salary, so the credit on Form 1116 eliminates the liability. Self-employed Americans in the UK are generally covered by UK National Insurance under the US-UK Totalization Agreement, so they do not owe US self-employment tax either, as our guide for a US citizen self-employed in the UK explains.
| Situation | Typical US tax due | Estimated payments needed? |
|---|---|---|
| UK employee, salary only | None after foreign tax credit | No |
| Dubai employee earning under $132,900 | None after the exclusion | No |
| Dubai employee earning well above $132,900 | Tax on the excess | Usually yes |
| Self-employed in the UAE | Self-employment tax of 15.3% | Usually yes |
| Self-employed in the UK with a certificate of coverage | Usually none | Usually no |
| Large investment portfolio, any country | Possible NIIT and top-up tax | Often yes |
The safe harbour rules
You do not need to predict your tax exactly. You avoid the penalty if your payments reach the smaller of two figures: 90% of the tax shown on this year's return, or 100% of the tax shown on last year's return. If last year's adjusted gross income was more than $150,000, or $75,000 if married filing separately, the second figure becomes 110%.
The zero prior-year rule
There is a third route. If you had no US tax liability for the whole of the previous year, and you were a US citizen or resident for that full 12-month year, no penalty applies. This often protects people in the first year after a change, such as a move from London to Dubai. However, it protects only that first year.
Due dates and the expat extension trap
The four instalments for a calendar-year taxpayer are due on 15 April, 15 June, 15 September and 15 January of the following year. If a date falls on a weekend or US federal holiday, it moves to the next business day.
Americans abroad receive an automatic two-month extension to file, to 15 June. That extension does not move estimated payment dates, and it does not extend the time to pay. Consequently, an expat who waits until June to think about the current year has already missed the first instalment. Our guide to US expat tax deadlines lists every date in one place.
How to pay the IRS from abroad
The IRS lists its options on its Payments page. IRS Direct Pay and the Electronic Federal Tax Payment System (EFTPS) both draw on a US bank account. If you have no US account, you can pay by debit or credit card through an approved processor, for a fee, or by international wire transfer. Whichever you use, select the correct tax year and "estimated tax" as the payment type. A payment applied to the wrong year is a common and avoidable error.
Annualising uneven income
If your income arrives unevenly, such as a large bonus in December, you can use the annualised income instalment method on Form 2210, Schedule AI. This matches required payments to when income was actually earned and can remove a penalty for the earlier quarters.
What the underpayment penalty costs
The penalty is an interest charge, calculated separately for each instalment on Form 2210. The rate is the federal short-term rate plus three percentage points, reset quarterly by the IRS. It runs from each due date until the tax is paid. Therefore, catching up late still reduces the charge.
An illustrative case
Consider an illustrative American engineer who moved from Manchester to Dubai in January 2026 on a salary equal to $260,000. The figures are illustrative. In 2025, UK tax covered his US liability, so his 2025 US tax was zero. For 2026, he excludes $132,900 and owes US tax on the rest, with no foreign tax to credit. Because his prior-year tax was zero, no penalty applies for 2026. For 2027, however, he must pay 110% of his 2026 tax, or 90% of his 2027 tax, across four instalments. Our guide to US citizens working in Dubai covers the wider position, and our foreign tax credit and double taxation page explains why the UK years were different.
If you are unsure whether estimated tax payments apply to you, book a consultation with our US expat tax team. We calculate the safe harbour amount and set up your payment schedule.
Frequently Asked Questions
Do US expats have to make estimated tax payments?
Yes, if they expect to owe at least $1,000 of US tax after withholding and credits. Estimated tax payments for US expats follow the same rules as for US residents under Internal Revenue Code section 6654. Expats whose foreign tax credit or Foreign Earned Income Exclusion removes all US tax do not need to pay.
When are estimated tax payments due for Americans abroad?
The four instalments are due on 15 April, 15 June, 15 September and 15 January of the following year. The automatic two-month filing extension for Americans abroad does not change these dates.
How much do I need to pay to avoid the underpayment penalty?
You must pay the smaller of 90% of the current year's tax or 100% of the prior year's tax. If your prior-year adjusted gross income exceeded $150,000, or $75,000 if married filing separately, the prior-year figure is 110%.
Do I owe a penalty if I had no US tax last year?
No. If your US tax liability for the previous year was zero and you were a US citizen or resident for that full 12-month year, the underpayment penalty does not apply for the current year.
How can I pay estimated tax without a US bank account?
You can pay by debit or credit card through an IRS-approved payment processor, or by international wire transfer. IRS Direct Pay and EFTPS both require a US bank account.
Do self-employed Americans in Dubai pay US self-employment tax?
Yes. The United States has no Totalization Agreement with the UAE, so a self-employed US citizen in Dubai owes 15.3% self-employment tax on net earnings. The Foreign Earned Income Exclusion does not reduce it, so estimated payments are usually required.
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