Quarterly Tax Calculator
Calculate your quarterly tax obligations based on actual income earned each quarter using the annualized income installment method. This specialized calculator helps self-employed individuals, freelancers, business owners, and anyone with seasonal or highly variable income determine precise quarterly tax payments that match actual earnings patterns rather than equal quarterly estimates. Unlike the standard method of dividing annual tax into four equal payments, this approach calculates tax based on income actually earned during each quarter, preventing overpayment in slow quarters and underpayment in high-earning quarters. Enter your gross income and deductible business expenses for the specific quarter (Q1, Q2, Q3, or Q4), along with year-to-date income totals to enable accurate annualization. The calculator projects your annual income based on year-to-date performance, calculates self-employment tax and federal income tax using 2024 tax brackets, and recommends the appropriate quarterly payment amount. Shows both the annualized calculation method and simplified 28% rule of thumb estimate. Perfect for businesses with seasonal fluctuations, commission-based income, project-based freelancing, or any irregular income patterns. Due dates: Q1 April 15, Q2 June 15, Q3 September 15, Q4 January 15.
Gross income earned during this quarter
Deductible expenses incurred this quarter
Total income so far this year (for annualized calculation)
What are quarterly taxes and why do I need to pay them?
Quarterly taxes are estimated tax payments made four times per year on income not subject to automatic withholding. The U.S. tax system operates on "pay-as-you-go" basis - taxes must be paid throughout the year as income is earned, not just at tax time. Self-employed individuals, freelancers, business owners, landlords, and investors must pay quarterly because no employer withholds taxes. Required if you expect to owe $1,000+ after withholding and credits. Ensures steady government revenue and prevents taxpayers from facing massive bills on April 15.
How much should I pay in quarterly taxes?
Conservative rule: Set aside 25-30% of gross self-employment income for federal taxes (15.3% self-employment tax + 10-15% income tax depending on bracket). More precise: Calculate net income after expenses, apply self-employment tax (15.3%), then income tax on taxable income after deductions. Safe harbor method: Pay 100% of prior year total tax divided by 4 (110% if AGI >$150k). High earners may need 30-40%. Always add state taxes (typically 3-10%). Better to overpay and get refund than underpay and face penalties plus interest.
What are the quarterly tax payment deadlines for 2024?
Q1 (January 1 - March 31): Due April 15, 2024. Q2 (April 1 - May 31): Due June 17, 2024 (note: only 2-month period). Q3 (June 1 - August 31): Due September 16, 2024. Q4 (September 1 - December 31): Due January 15, 2025. If deadline falls on weekend/holiday, payment due next business day. Exception: Skip Q4 if you file complete tax return and pay full balance by January 31, 2025. Mark calendar with reminders - missing deadlines triggers immediate penalties.
What is the penalty for not paying quarterly taxes?
Underpayment penalty calculated using Form 2210 based on federal short-term interest rate plus 3 percentage points (typically 5-8% annually). Applied quarterly to underpaid amount. Example: Owe $10,000 but only paid $6,000 throughout year - $4,000 underpayment at 7% for average 6 months = $140 penalty. Penalty waived if: total tax minus withholding under $1,000, paid 90% of current year tax, paid 100% of prior year tax (110% if high income), reasonable cause (casualty, disaster, unusual circumstances). File Form 2210 to request waiver.
Can I pay different amounts each quarter based on actual income?
YES - annualized income installment method (Form 2210 Schedule AI) allows variable payments based on actual quarterly income. Perfect for seasonal businesses, commission-based income, or irregular freelance work. Example: Earn 60% of annual income in Q4 - you can pay most taxes in Q4 instead of equal quarterly amounts. Must calculate cumulative income through each quarter, annualize it, and pay proportional tax. More complex but can save money and reduce penalties if income fluctuates. Most tax software supports this calculation.
Do I need to pay state quarterly taxes too?
Most likely YES if your state has income tax. 43 states plus DC have income tax requiring quarterly payments (Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, Wyoming exempt). State deadlines usually match federal (April 15, June 15, Sept 15, Jan 15) but some differ. Calculation separate from federal - check state revenue website. Some states allow increased W-4 withholding instead of quarterly payments. Combined federal + state quarterly burden can reach 35-45% of self-employment income in high-tax states (CA, NY, NJ, MA).
How do I make quarterly tax payments?
Federal: IRS Direct Pay (free, immediate, at irs.gov/payments), EFTPS (Electronic Federal Tax Payment System - enroll at eftps.gov, schedule in advance), credit/debit card through approved processors (1.85-1.99% fee), mail Form 1040-ES with check. State: Each state has online portal (e.g., California FTB Web Pay, NY DTF). Best practice: Set up EFTPS account, schedule all 4 quarterly payments in January, automatic withdrawal on due dates. Keep confirmation numbers. Track payments in spreadsheet or tax software. Consider separate business savings account for tax money.
What if my income changes during the year?
Recalculate and adjust! Income increases: Pay more in remaining quarters to avoid underpayment penalty. Income decreases: Reduce remaining payments (you can always amend if overpaid). Job loss: Stop quarterly payments if no income. New W-2 job: May be able to stop quarterly payments if withholding sufficient, or increase W-4 withholding to cover remaining obligation. Windfall (large contract, investment gain): Make additional payment immediately or increase next quarter. Review quarterly based on actual year-to-date income - flexibility prevents overpaying and underpaying.
Can I increase my W-4 withholding instead of paying quarterly?
YES - excellent strategy if you have W-2 job plus side income! Increase withholding on Form W-4 to cover side business taxes instead of making quarterly payments. IRS treats withholding as paid evenly throughout year (even if increased in December), avoiding timing penalties. Example: $50k W-2 + $20k side business owing $4k extra - request additional $333/month W-4 withholding instead of 4 quarterly $1k payments. Simpler, automatic, avoids missing deadlines. Only downside: Less control over cash flow timing. Ideal for small side businesses.
What income is subject to quarterly tax payments?
All income without automatic withholding: Self-employment (1099-NEC, sole proprietor), freelance/gig work (Uber, DoorDash, Etsy), rental property income, investment income (dividends, capital gains, interest above withholding), business profits (partnership, S-corp distributions), royalties, prizes/awards, gambling winnings, retirement withdrawals without withholding, alimony (pre-2019), farm income, foreign income. Even if you have W-2 job, substantial outside income requires quarterly payments. Threshold: Expect to owe $1,000+ after withholding and credits.
How do quarterly taxes work for new businesses?
First year challenging due to unknown income. Options: 1) Estimate conservatively based on business plan, adjust as you go. 2) If you had W-2 job last year, use safe harbor (100% of prior year W-2 withholding divided by 4). 3) Wait until Q2 once you have actual Q1 results. 4) Overpay early quarters, reduce later if overestimated. No penalty if total annual payment meets safe harbor or 90% threshold. Many first-year businesses underpay Q1-Q2, catch up Q3-Q4 when income clearer. Consult CPA for first-year strategy - mistakes are common and expensive.
Do I need to file anything when making quarterly payments?
NO filing required for quarterly payments - just send money! Form 1040-ES is worksheet with payment vouchers for mailing checks, but no "quarterly tax return." Simply calculate amount owed, pay via preferred method (Direct Pay, EFTPS, credit card, check), keep confirmation. All quarterly payments reconciled on annual Form 1040 filed by April 15. Line 26 reports total estimated payments made. Overpayments = refund. Underpayments = balance due plus possible penalty. Keep records: payment dates, amounts, confirmation numbers. If audited, proves timely payment and avoids penalties.