Quarterly Estimated Taxes Paycheck withholding counts toward your estimated tax
Tax taken out of your wages counts the same as the payments you send yourself.
Withholding counts as paid evenly
Unless you choose otherwise, the IRS treats one-fourth of your year's withholding as paid on each of the four due dates. It doesn't matter which month the tax actually came out of your paycheck.
So a dollar withheld in November can help cover a June due date. That's why an owner with a regular paycheck often needs smaller estimated payments than an owner who pays all their tax through four checks.
You can also choose to use the actual dates your tax was withheld. That can help if most of your withholding came early in the year. You make that choice on Form 2210.
The safe harbor counts both
The safe harbor adds your withholding and your estimated payments together. If the tax you still owe when you file, after withholding, is under $1,000, you won't owe the penalty. We check this with your real numbers.
How we help with payroll
When we help with payroll, we help decide who gets paid and how much tax each paycheck should take out. We help set payroll up, and your payroll company runs each payday, makes the tax deposits and sends the W-2s.
If we need your year-to-date withholding, the payroll report or just the number is all we need. Keep your payroll login to yourself.
Starting a paycheck this year changes your estimate. If you started paying yourself wages, count the tax that's being withheld now before you copy last year's payments. If you stopped wages, it works the other way. Tell us which one fits. Last year's total tax still matters, and so does this year's withholding.
A December bonus can help
Some owners worry in June about tax on a bonus they won't pay until December. Because withholding counts as paid evenly, extra withholding on that bonus can help cover the earlier dates too. You may not need a giant June payment.
This works when the tax is actually withheld from the bonus. We help you plan the bonus run with your payroll company ahead of time, so the withholding is in place before the year ends.
If you don't get a paycheck at all, tell us. Then your four estimated payments do all the work. If your wages come from your own company, see the page on who pays. The company may be your employer, but the withholding still counts toward your own estimated tax.
Questions owners ask about withholding
Can I raise my withholding and skip the quarterly payments? Sometimes. We compare your year-to-date withholding with the safe harbor amount. If your paycheck can cover it, we'll tell you and help you set the withholding. Your payroll company still runs payday.
Does extra withholding in December help with June? Yes. The IRS treats withholding as paid evenly through the year, so tax withheld in December counts toward the earlier dates.
What if my spouse has a W-2 job? If you file jointly, your spouse can raise the withholding at that job with a new Form W-4. That withholding counts the same way.
Keep reading on this site.
Tell us about your withholding.
Tell us whether a paycheck already takes tax out, and which due date is next.
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