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Try Our Free Estimated Quarterly Tax Calculator | Avoid Headaches and IRS Penalties

By March 12, 2024 No Comments

Yes – tax estimates are dreadful, but they can make or break a tax filing (and your sanity) depending on how they’re handled. Most people feel like they don’t have a tax plan, and no one we talk to seemed to have a tool that helped. So, we took on that challenge and are proud to share our free estimated quarterly tax calculator – to ensure you have a plan and have peace of mind headed into the next tax season. 

How Our Estimated Quarterly Tax Calculator Helps You

We created this free estimated quarterly tax calculator because there should be as much communication as possible between you and your tax expert. While automation is an incredibly useful tool that has helped push the tax industry forward, there are simply some things that must be done manually – and that’s okay. 

This tax calculator has 3 major purposes: 

  • Compliance
  • Cash Flow
  • Communication

1. Compliance

Staying compliant is important for avoiding large underpayment penalties – because why would you want to give the government more if you don’t have to? We built the calculator on a simple concept that the IRS promotes to avoid underpayment penalties based upon paying 100% of your tax liability from the previous year. By using this simple calculator, you’re less likely to end up with a surprise that costs you thousands of dollars in underpayment penalties. 

2. Cashflow

By filing taxes quarterly, you also have the added benefit of easing your cash flow into a more predictable cadence. For example, rather than having to owe one giant check at the end of the year that amounts to $40,000, it is much easier for most of us to pay out four quarterly payments of $10,000. 

3. Communication

This estimated quarterly tax calculator isn’t just for conveying information with your tax expert, but also for communicating with your future self! By logging payment dates, notes regarding those payments, and any questions you may have at that moment in time, you’ll ease the process and make taxes more manageable for everyone involved.

How to Use the Estimated Quarterly Tax Calculator

Here are a few quick steps on how to use this handy tax calculator.

Step 1:Quarterly Tax Payment Calculator

First, have last year’s tax info handy. Plug in the appropriate values in the yellow fields and the estimated quarterly tax payment calculator will give you an estimate of what you owe this year.

Step 2:Quarterly Tax Payment Calculator

For federal taxes, enter your planned W-2 withholding(s) in the yellow field (and if you or your spouse has a W-2). This will auto-populate how much you need to pay in taxes each quarter. 

To the right of the Federal Taxes Table, you’ll see a place to record what you’ve already paid, when you paid it, and any notes related to the payment such as from a specific account. While many things are automated in our business lives, anything we do personally is usually outside of those systems. This tool allows you to capture those items and communicate those to your tax advisor (and to future you). 

Step 3:

quarterly tax payment calculator

Do the same for your state taxes as you did for the federal portion, this time adjusting the tax rate for the appropriate state in which you do business. 

The State Taxes Table has the same area to the right of it where you can record payments, track when those payments were made, and add any notes that you may need to keep track of regarding those payments. 

*Keep in mind that this is a simplistic percentage and as such, does not take into account the deductions and credits available specific to certain states. For a customized and more precise measurement of quarterly state taxes, schedule time with a team member below. 

Step 4:Quarterly Tax Payment Calculator

You’ll most likely have a few questions regarding your taxes as you use this calculator, make payments, and record notes. This section is for you to keep track of any questions that arise during the process so you can remember to ask them when you meet with an Acuity Tax Pro.

Ready to get started? You can download our FREE
Estimated Quarterly Tax Calculator below.

Free Estimated Quarterly Tax Calculator FAQs

What are quarterly taxes?

Quarterly taxes simply means we are pre-paying our annual bill in four installments throughout the year. The core idea here is to pay tax throughout the year so that you can avoid having a big bill when April rolls around. As we all know, as entrepreneurs, startups, small business owners, we need cash. And this better allows you to plan for your cash flow with quarterly installments.

Are quarterly tax payments required?

This is the question that we get asked most frequently. The United States operates on a pay as you go tax system. So just like employees have taxes taken out of their paychecks, business owners need to regularly pay their taxes throughout the year, too. And if you don’t pay taxes quarterly or you pay later than the due date, the IRS will impose a penalty for not paying enough quarterly taxes. 

At Acuity, we recognize that this can be tough. So, how do you estimate them? We have created our free and downloadable quarterly tax calculator, and this will help you figure out the correct amount of tax to pay so that you can avoid IRS penalties. 

How do I pay my quarterly taxes?

It’s actually pretty easy. You can pay your quarterly taxes online on the official website. Click on pay, and when you click on “make a payment,” you’ll select either bank account or credit or debit. And from there, when the IRS asks you for the type of payment, select payment for estimated tax.

What are the quarterly tax dates?

The due dates for quarterly tax payments are April 15th, June 15th, September 15th and January 15th. However, if the 15th of the month falls on a Saturday, a Sunday, or a federal holiday, the date would shift to the next normal business day.

How do I calculate my quarterly taxes?

The easiest method here is to estimate using last year’s tax return. Take last year’s federal total tax liability, subtract out any withholding expected for this year. And the remaining balance is divided into your four equal installments. So those will be your quarterly payments. 

There’s also a second method. You can calculate your quarterly tax payments based on this year’s business income and expenses, and then pay the amount of tax based on that calculation in your four installments. 

Here at Acuity, we take a close look at our clients’ bookkeeping throughout the year and let our clients know exactly how much estimated tax they need to pay each quarter. So if you don’t want to have to deal with the calculations yourself, we are happy to help.

Have Questions? Need Help?

Have questions or need help using the quarterly tax payment calculator? Book a free consultation with our team – we’re here to help!

If you’re ready to get this off your plate entirely, talk to a team member about our tax services and how we can ensure you are more than ready for the upcoming tax season.