Quarterly Taxes Without the Panic: A Simple System for Estimated Payments
If you’ve ever hit tax season and thought, “Wait… I owe HOW much?” you’re not alone.
Estimated taxes are one of those things nobody explains clearly, and then you’re expected to magically know:
how much to set aside,
when to pay it,
and how to avoid getting smacked with penalties.
So let’s make this simple.
This post is a no-drama system for handling quarterly estimated taxes, especially if you’re a business owner, self-employed, or your income isn’t a consistent paycheck.
The problem I see all the time
Most business owners do one of two things:
They don’t set anything aside, then taxes become a financial jump scare.
They set aside “a random amount,” and either over-save (cash feels tight) or under-save (April feels rude).
Neither one feels good. The goal is a system that’s boring. Boring is beautiful.
Why it matters (what it’s costing you)
When estimated taxes aren’t handled consistently, it usually creates:
cash flow stress and late-night money math
avoidance (which turns into bigger problems)
surprise balances due
possible underpayment penalties
resentment toward your business, which is honestly just unfair
Your business should not feel like an emotional roller coaster. Let’s fix the tax side so it feels predictable.
The simple “Estimated Tax” system (practical, not complicated)
1) Create a separate “Tax Savings” bucket
This is the biggest game-changer.
Use a separate bank savings account (or a separate “bucket” in your bank if they offer it) and label it:
TAX SAVINGS. Not “savings.” Not “extra.” TAX.
When it has a purpose, you won’t accidentally spend it on a new laptop because you “felt rich” on Tuesday.
2) Pick a default set-aside percentage
If you want the cleanest starting point, pick a percentage of your income and move it into Tax Savings every time money comes in.
A few general starting points I see work often:
25% if you’re self-employed and not sure where to start
30% if your profit is strong and/or you’re in a higher bracket
15–20% if you also have W-2 withholding somewhere else (spouse job, part-time W-2, etc.)
This is not one-size-fits-all, but it gets you out of the “random guessing” phase fast.
Pro tip: If you are a “I will forget” person, set an automatic transfer that runs weekly.
3) Put the 4 estimated tax dates on your calendar now
These are typically the due dates for federal estimated payments:
April 15
June 15
September 15
January 15
If a due date lands on a weekend or holiday, it can shift, so always confirm the IRS deadline that year.
Set reminders for:
2 weeks before (to check your numbers)
2 days before (to actually schedule payment)
4) Use “safe harbor” to remove the guesswork
Here’s the easiest way to stay out of trouble without doing advanced math.
Many taxpayers can avoid underpayment penalties by paying in at least:
100% of last year’s total tax (or 110% if income was higher), or
90% of this year’s total tax
Translation: if last year is a good baseline, you can use it as a roadmap instead of trying to perfectly predict your current year.
If your income is swinging wildly this year (new business, huge growth, big life changes), we can adjust. But “safe harbor” is a great starting point for stability.
5) Do a mini check-in monthly (so quarters don’t surprise you)
This ties perfectly into that 15-minute Monthly Money Date from last week.
Once a month, look at:
income so far this year
profit so far this year (income minus expenses)
how much you’ve saved in the Tax Savings bucket
If you’re consistently saving and checking monthly, quarterly payments stop feeling like a crisis.
Mini example (real life)
Let’s say you’re a service-based business owner and you decide to set aside 25% of every deposit.
In January and February, business is strong, so you’re moving money into Tax Savings consistently. Then you hit March, buy a new computer, pay an annual insurance premium, and your profit dips.
Because you did a quick monthly check-in, you catch it early. You realize:
your income is up,
your expenses are also up,
and your estimated payment should be adjusted a bit.
Instead of scrambling in April, you make one small tweak now. That’s the entire point.
Taxes shouldn’t feel like a surprise party you didn’t want.
Quick checklist (save this)
If you want the short version, here it is:
Create a separate Tax Savings account/bucket
Choose a default set-aside % (start with 25% if unsure)
Calendar the quarterly due dates with reminders
Use last year’s tax as a baseline when possible
Do a quick monthly check to keep it predictable
If you want help dialing in your percentage, estimating your quarterly payments, or building a simple system that fits your business, I’ve got you.
Book a consult here: https://calendly.com/sara-dunhambookkeepingservices
If you’d rather send info first, use my secure upload link: https://www.cognitoforms.com/DunhamBookkeepingServices/SecureDocumentUpload
(This post is for general education and not individualized tax advice. Tax rules vary by situation and state.)
