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How to estimate quarterly taxes

how to estimate quarterly taxes

Things You'll Need

Table of tax rate schedules for the current tax year


Refer to the previous year's tax return and record your Adjusted Gross Income, or AGI, from last year.

Add any anticipated additional income for the new (estimated) tax year to the previous year's AGI.

If income is anticipated to be less than that of the previous year, subtract that amount from the previous year's AGI.

Review the itemized list and amounts of deductions made in the previous year and add or subtract anticipated changes in deductions for the upcoming tax year. These will add up to your estimated total deductions for the new tax year.

If you do not itemize deductions or if you have deductions that amount to less than the standard deduction, use the latter. The current year's standard deduction amounts can be found in the IRS link in the References section.

Subtract either the amount shown in step 2 or step 3 (whichever is appropriate for your situation) from the AGI amount shown in step 2.

Multiply the number of personal exemptions by the current year's personal exemption amount and subtract this total from the amount shown in step 4.


current year's personal exemptions can be found in the IRS personal exemptions publication in the References section.

Calculate the annual tax payment required using either tax tables Schedule X (for single taxpayers), Schedule Z (for head of household), Schedule Y (for married couples filing jointly) or Schedule Y-Z (for married persons filing separately). If you owe self-employment tax (Social Security and Medicare), be sure to calculate this amount and add it to the federal income tax amount. See the IRS self-employment section in References for the current rate.

Subtract from the amount shown in step 6 any tax credits (such as tax refunds deferred from the previous year and credited to the current year) to obtain estimated tax due.

Adjust the tax amount calculated in step 8 by multiplying it by 90 percent. You will have the option of paying estimated taxes based on 90 percent of the amount shown in step 7 or 110 percent of the tax paid on your previous year's return, whichever is lower.

Divide the annual amount calculated in step 8 by four. This will be the estimated tax payment due quarterly and to be paid by April 15, June 15, Sept.15 and Jan. 15 of the following year.

Category: Taxes

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