You are correct that it is cumulative. You can always pay higher at the beginning and lower at the end. The fact is that paying estimated tax is just that, an estimate of what you will owe for the year. It may end up being not accurate if your income is variable, but the main reasons for estimated payments are that you don't have a huge payment to make all at once next year, and you avoid paying PENALTY and/or INTEREST charges. There are "safe harbor" rules for California estimated payments so that you can avoid a PENALTY. However you could be charged INTEREST if you don't pay estimated payments quarterly, on time, as calculated (or higher). Here are the safe harbor rules;
Generally, taxpayers can avoid paying California penalties for underpayment of estimated taxes by paying the lesser of the following:
1. 90% of the current year's tax
or
2. 100% of the preceeding year's tax
But high income taxpayers must meet some different standards as listed below:
1. When current year AGI exceeds $150,000 ($75,000 if married filing separately) but is less than $1,000,000 ($500,000 if married filing separately), they must pay in 110% of the prior year's amount to avoid the penalty.
2. Individuals with annual AGI of $1,000,000 or more must pay in 90% of the current year's tax to avoid a penalty.
