About

For freelancers, independent contractors, and small business owners, tax season is not a once-a-year event—it is a quarterly obligation. Failure to pay 'Estimated Tax' throughout the year can result in significant underpayment penalties and interest charges from tax authorities. This tool allows you to project your annual liability and break it down into manageable quarterly chunks.

Unlike simple calculators, this tool lets you input an 'Effective Tax Rate.' Since tax brackets are progressive, your effective rate (the average percentage you pay on total income) is often lower than your top marginal bracket. Using an accurate effective rate prevents you from overpaying and tying up cash flow that could be used for business growth.

Formulas

The calculation determines the Net Taxable Income and applies the user-defined Effective Tax Rate.

NetIncome = GrossIncome − Expenses − Deductions

TotalTax = NetIncome × EffectiveRate100

QuarterlyPayment = TotalTax4

Reference Data

Payment Period	Earnings Period	Due Date (Typical)
Quarter 1	Jan 1 – Mar 31	April 15
Quarter 2	Apr 1 – May 31	June 15
Quarter 3	Jun 1 – Aug 31	September 15
Quarter 4	Sep 1 – Dec 31	January 15 (Next Year)
*Note: Dates may shift if they fall on a weekend or holiday.

Frequently Asked Questions

Your effective tax rate is the percentage of your total income that goes to the IRS. It is an average. For example, even if you are in the 24% tax bracket, your effective rate might only be 18% because the first portion of your income is taxed at lower rates (10%, 12%).

The IRS fiscal quarters are not standard 3-month blocks. Q1 is 3 months, Q2 is 2 months, Q3 is 3 months, and Q4 is 4 months. Despite this, payments are usually split into four equal installments for simplicity unless you use the 'annualized income' method.

The IRS charges an underpayment penalty. This is calculated like interest on the amount you failed to pay. It is best to pay as soon as you remember, even if late, to minimize this interest.

Yes. If you are self-employed, you must cover both income tax and the 15.3% Self-Employment tax (Social Security and Medicare). Ensure your 'Effective Rate' input includes both components.