Professional services
Quarterly Tax Calculator
Works quarterly estimated payments, where the safe harbour is what avoids the penalty.
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. Safe harbour rules let you avoid an underpayment penalty by paying a set percentage of the prior year's tax even if you end up owing more, which is useful when income is unpredictable. The percentage rises for higher incomes and the rules change; confirm the current figures. Payment deadlines are not evenly spaced across the year.
Get a Free Business AuditHow the calculation works
The expected annual tax divided across the payment periods, with the payment due each quarter. The periods are not calendar quarters of equal length, which catches people, and the penalty for underpayment is assessed by period rather than annually, so paying the right total late in the year does not cure an earlier shortfall.
What moves the number
- Expected annual tax including self-employment tax.
- Amounts already withheld from any wage income.
- Safe harbour based on the prior year's tax.
- Timing, since the periods are uneven.
Where this one goes wrong
Paying based on the prior year's tax is the safe harbour that avoids a penalty even if this year turns out larger, and it is usually the simplest approach for someone whose income is unpredictable. The thresholds and percentages are set by the IRS and higher earners face a different prior-year percentage, so confirm the current rules. The periods being uneven in length is the other trap, and a payment made on a calendar quarter assumption can be late.
Before you quote
- Check the prior-year safe harbour before estimating this year.
- Note the actual payment due dates, which are not even quarters.
- Count wage withholding against the requirement.
Where the rules come from
Questions
About this calculator
What is the safe harbour for estimated tax?
Paying based on the prior year's tax generally avoids a penalty even if this year is larger, which suits unpredictable income. The percentages differ for higher earners and the rules change, so confirm the current position with the IRS.
Can I pay it all at the end of the year?
Not without risking a penalty, because underpayment is assessed by period rather than annually. Paying the correct total late does not cure an earlier shortfall, which is why the quarterly schedule matters rather than just the amount.
Are the payment periods calendar quarters?
Not exactly, and the due dates do not fall evenly through the year. A payment made on a calendar quarter assumption can be late, so working from the actual published due dates is worth the minute it takes.
The formula
required = the lower of projected tax and the safe harbour percentage of last year's tax, less withholding
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How to use this calculator
- Expected net business income ($). Enter your own figure; the page starts at $96,000.
- Combined tax rate you expect (%). Income tax plus self-employment tax.
- Last year's total tax ($). Enter your own figure; the page starts at $24,000.
- Tax withheld from other income ($). Enter your own figure; the page starts at $3,200.
- Safe harbour percentage (%). Often 110% for higher incomes. Check the current rule.
- Quarters remaining. Enter your own figure; the page starts at 4.
The result updates as you type, so you can try a figure, see what it does to each quarterly payment, 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 |
|---|---|
| Expected net business income | $96,000 |
| Combined tax rate you expect | 30% |
| Last year's total tax | $24,000 |
| Tax withheld from other income | $3,200 |
| Safe harbour percentage | 100% |
| Quarters remaining | 4 |
What comes out
| Result | Value |
|---|---|
| Each quarterly payment main result | $5,200 |
| Projected tax for the year | $28,800 |
| Safe harbour total | $24,000 |
| Amount you must pay in | $20,800 |
| Basis used | Safe harbour on last year |
Pay $5,200 per quarter, totalling $20,800. The lower of projected tax ($28,800) and safe harbour ($24,000) governs, so the basis here is Safe harbour on last year.
How sensitive the answer is
Holding everything else steady and changing only expected net business income, this is what happens to each quarterly payment. It is worth knowing which of your inputs the answer actually hinges on, and which barely move it.
| Expected net business income ($) | Each quarterly payment |
|---|---|
| $48,000 | $2,800 |
| $72,000 | $4,600 |
| $96,000 example above | $5,200 |
| $144,000 | $5,200 |
| $192,000 | $5,200 |
Every other input is held at the example value while this one changes, which is not how a real job behaves. Treat it as a guide to which number matters most, not as five separate quotes.
What each figure means
- Expected net business income ($)
- A money amount, starting at $96,000.
- Combined tax rate you expect (%)
- Income tax plus self-employment tax.
- Last year's total tax ($)
- A money amount, starting at $24,000.
- Tax withheld from other income ($)
- A money amount, starting at $3,200.
- Safe harbour percentage (%)
- Often 110% for higher incomes. Check the current rule.
- Quarters remaining
- A number, between 1 and 4, starting at 4.
What the results tell you
| Result | What it is |
|---|---|
| Each quarterly payment | The headline result. A money figure. |
| Projected tax for the year | A money figure. |
| Safe harbour total | A money figure. |
| Amount you must pay in | A money figure. |
| Basis used | A category or planning selection, rather than a measured quantity. |
Keep going
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