Overview
With your Heard subscription, you can expect to receive your quarterly estimates once you complete your quarterly checklist. If your onboarding is incomplete, you missed the deadline to submit the quarterly tax checklist, or it’s now past the IRS payment deadline, you may need to calculate the estimate manually.
When are quarterly tax estimates due?
For estimated tax purposes, the year is divided into four payment periods, each with a specific payment due date per quarter.
- April 15th
- June 15th
- September 15th
- January 15th
If the payment due date falls on a weekend or holiday, the deadline moves to the next business day.
How to manually calculate quarterly estimated tax
Both Sole Proprietors and S Corporations are required to pay quarterly tax estimates. You can choose to calculate with either method:
- The Safe Harbor Method: The simplest, safest approach is to base your projections on your prior tax year. You'll take the total tax liability amount you paid last year and divide it by 4 to determine your quarterly estimate. For example, if you paid $1,000 last year for federal taxes, you'll divide it by 4 and pay $250 for this quarter's tax payment. You'll do the same calculation for your state quarterly tax payment (if it applies). To reduce the risk of an underpayment penalty, make sure to pay at least 90% of what you owe for the current year or 100% of what you owe for the prior year.
- Estimated Tax Worksheet: If you were not in business the prior year or if your income and expenses have significantly changed, you can manually calculate your estimate. You can prepare your own estimate by following the IRS guidance on using the 1040-ES form. Heard has prepared The Quarterly Estimated Tax Worksheet for Therapists, which gives you the tools to calculate how much you should pay.
Some states may also require you to pay estimated taxes; check your state tax department's website for details.
How to pay quarterly taxes
What are the risks associated with not paying?
If you underpay quarterly tax estimates or skip payments, you could be subject to an underpayment penalty. As this is an estimate, it's generally better to overpay than underpay when estimating.
If you do not submit and pay your quarterly estimate in time, we will account for it when preparing the following quarter's estimate. As a result, you may then see a larger estimate for the following quarter or at year-end.
Once you have completed your payments, please update your Heard account with your payment receipts so this can be factored into your annual tax liability. You can reference our article: How can I upload quarterly tax payment receipts to Heard?