The Easiest Way to Estimate Quarterly Taxes for Small Businesses
If you run a small business, quarterly taxes can feel like a guessing game.
How much should you pay? When do you pay it? What happens if you’re wrong?
Most owners wait until the last minute and then scramble, which leads to penalties, stress, and an unpleasant surprise during tax season.
The good news is that estimating quarterly taxes doesn’t have to be complicated.
With the right method, you can calculate your payment in minutes and stay ahead all year long.
Here’s the simplest way to do it.
What Quarterly Taxes Actually Are
Quarterly taxes are payments you send to the IRS four times a year so you can stay current on your income tax and self-employment tax.
The IRS expects you to pay taxes as you earn money, not just once a year in April.
So if you’re a small business owner, freelancer, LLC, or S Corp owner, you probably need to make these payments.
Step 1: Figure Out Your Expected Profit for the Year
To estimate quarterly taxes, you first need to know your taxable profit.
This is your revenue minus your business expenses.
You don’t need perfect numbers. An estimate is fine.
A quick way to calculate this is:
Look at last year’s profit, or
Average your last three months of profit and project it out for the year
This gives you a reasonable starting point.
Step 2: Calculate Your Estimated Tax Rate
Here’s the simplest safe estimate for most small business owners:
LLC or sole proprietor
15.3 percent for self-employment tax
10 to 22 percent for federal income tax depending on your income bracket
A safe combined estimate is 25 to 30 percent of your profit.
S Corp owners
If you’re an S Corp, your self-employment tax drops because you’re paying yourself a salary.
To keep it simple, many S Corp owners estimate 20 to 25 percent of profit, depending on salary and distributions.
If you want to be conservative, go with 30 percent no matter your structure. It’s better to save slightly more than come up short.
Step 3: Multiply Profit by Your Estimated Rate
Here’s the easy formula:
Estimated Profit × Estimated Tax Rate = Total Estimated Taxes for the Year
Example:
If you expect $100,000 in profit and use a 30 percent estimate:
100,000 × 0.30 = $30,000 for the year
That’s your total estimated tax.
Step 4: Divide by Four for Quarterly Payments
The IRS requires quarterly payments in April, June, September, and January.
Using the example above:
30,000 ÷ 4 = $7,500 per quarter
That’s how much you send each quarter.
Step 5: Adjust Every Three Months
Your income will fluctuate, so update your estimate each quarter based on your recent numbers.
If profit goes up, increase your payments. If profit drops, you can reduce what you send.
This keeps you accurate and prevents large year-end tax bills.
The Safest Shortcut: Save a Percentage of Every Deposit
If you want a method that requires almost no math, try this:
Every time your business gets paid, transfer 25 to 30 percent into a separate savings account.
Use that account to pay your quarterly taxes.
This keeps you safe, covered, and consistent all year long.
Quarterly Tax Due Dates
The IRS uses four due dates:
April 15
June 15
September 15
January 15
Missing these dates can trigger penalties and interest, even if you end up paying everything in full later.
Why Most Business Owners Get Quarterly Taxes Wrong
Here are the most common problems:
Guessing instead of calculating
Forgetting to set aside money
Not updating estimates when income changes
Waiting until tax season to get caught up
Using messy bookkeeping to estimate profit
Quarterly taxes become much easier when your books are clean and up to date.
How Clean Books Make Quarterly Taxes Simple
Quarterly taxes are stressful when you don’t know your profit.
But with clean, organized bookkeeping, estimating becomes:
Faster
More accurate
Less stressful
Easier to automate
When your books clearly show revenue, expenses, and profit, your quarterly taxes become a simple calculation instead of a guessing game.
Final Thoughts
Quarterly taxes don’t have to be confusing or intimidating.
With a simple percentage method, clean books, and a few minutes of planning each quarter, you can stay ahead of taxes all year long and avoid unwanted surprises.
If you want help estimating your quarterly taxes or need clean books to get started, Red Leaf Bookkeeping can make the process easy.
👉 Book a free Money Clarity Call today and get your quarterly taxes handled the right way.