Professional services
Estimated Tax Calculator
Works estimated tax payments, where recalculating mid-year beats guessing in January.
Result
Not tax advice, and not a filing calculation. This estimates what to set aside using rates you supply. Brackets, thresholds, deductions, credits and state rules change every year and interact with the rest of your return in ways no single calculator models. Confirm anything that affects a payment or a filing with an accountant. Straight-line annualisation assumes income arrives evenly, which for seasonal businesses it does not. Where income is genuinely uneven, the annualised income method for estimated payments may suit better and is worth discussing with an accountant.
Get a Free Business AuditHow the calculation works
Projected annual income and deductions give an expected tax, less amounts already withheld, divided across the remaining payment periods. The approach that works for variable income is to recalculate as the year progresses rather than fixing a figure in the first quarter and discovering in December that it was wrong.
What moves the number
- Projected annual income, revised as the year progresses.
- Withholding already applied.
- Self-employment tax where applicable.
- Whether the prior-year safe harbour is being relied on.
Where this one goes wrong
Income that arrives unevenly makes the even-payment approach awkward, and there is an annualised method that accounts for when income was actually received, which can reduce or eliminate a penalty for someone whose earnings came late in the year. It is more work and worth knowing exists. Increasing withholding on any wage income is also an alternative to estimated payments and is treated as paid through the year, which can be simpler.
Before you quote
- Recalculate as income becomes clearer rather than fixing it once.
- Consider increasing wage withholding instead of estimates.
- Ask about the annualised method if income is uneven.
Where the rules come from
Questions
About this calculator
What if my income arrives unevenly?
There is an annualised method that accounts for when income was actually received, which can reduce or eliminate a penalty for someone whose earnings came late in the year. It is more work than even payments and worth knowing exists.
Can I use withholding instead of estimated payments?
Where there is wage income, increasing withholding is an alternative and it is treated as paid through the year, which can be simpler than managing quarterly payments. For a household with one wage and one self-employed earner it is often the easier route.
Should I fix the figure in the first quarter?
Better to recalculate as the year progresses, since income projections made in spring are frequently wrong by autumn. Revising each quarter keeps the payments close to the eventual liability rather than producing a large settling up in April.
The formula
annualise income to date, apply the rate, then compare against what should have been paid by now
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How to use this calculator
- Income so far this year ($). Enter your own figure; the page starts at $62,000.
- Months elapsed. Enter your own figure; the page starts at 8.
- Combined tax rate (%). Enter your own figure; the page starts at 30%.
- Estimated tax paid so far ($). Enter your own figure; the page starts at $12,000.
- Expected deductions ($). Enter your own figure; the page starts at $14,600.
The result updates as you type, so you can try a figure, see what it does to shortfall to make up, and change it back. Nothing you enter is sent anywhere or saved.
A worked example
These are the figures the calculator opens with. Every number in the results column below is produced by the same calculation the page runs, so you can follow it through before putting your own figures in.
What goes in
| Input | Value |
|---|---|
| Income so far this year | $62,000 |
| Months elapsed | 8 |
| Combined tax rate | 30% |
| Estimated tax paid so far | $12,000 |
| Expected deductions | $14,600 |
What comes out
| Result | Value |
|---|---|
| Shortfall to make up main result | $3,680 |
| Projected annual income | $93,000 |
| Projected annual tax | $23,520 |
| Should have paid by now | $15,680 |
| Per month for the rest of the year | $2,880 |
You are $3,680 behind where payments should be by month 8. Catching up needs $2,880 a month for the rest of the year.
How sensitive the answer is
Holding everything else steady and changing only income so far this year, this is what happens to shortfall to make up. It is worth knowing which of your inputs the answer actually hinges on, and which barely move it.
| Income so far this year ($) | Shortfall to make up |
|---|---|
| $31,000 | $0 |
| $46,500 | $0 |
| $62,000 example above | $3,680 |
| $93,000 | $12,980 |
| $124,000 | $22,280 |
Every other input is held at the example value while this one changes, which is not how a real job behaves. Treat it as a guide to which number matters most, not as five separate quotes.
What each figure means
- Income so far this year ($)
- A money amount, starting at $62,000.
- Months elapsed
- A number, between 1 and 12, starting at 8.
- Combined tax rate (%)
- A percentage, between 0 and 60, starting at 30%.
- Estimated tax paid so far ($)
- A money amount, starting at $12,000.
- Expected deductions ($)
- A money amount, starting at $14,600.
What the results tell you
| Result | What it is |
|---|---|
| Shortfall to make up | The headline result. A money figure. |
| Projected annual income | A money figure. |
| Projected annual tax | A money figure. |
| Should have paid by now | A money figure. |
| Per month for the rest of the year | A money figure. |
Keep going
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