Tax Rate for Quarterly estimate is extremly high above 75% of my net earnings after expense's. Anyone know why this is?

Welcome to the Community forum, hungryhorse.

QuickBooks Self-Employed (QBSE) is a product which help self-employed individuals in tracking your business related transactions (income and spending). You will be able to claim your home office and mileage deductions as well.

We calculate estimated taxes for self-employed users with a service-based business. Calculation of your taxes is based on three main things:

• Self-employment income and deductions
• Projections for the current year
• Tax bracket and tax profile

Normally, estimated payments seems high due to projections of profit for the entire year. Since a tax estimate is not for the money you have already made, but for the money you will likely make for the rest of the year.

I’m including some helpful articles that contains detailed information about estimated taxes:

• Self-Employment Taxes
• Estimated Taxes explained
• How we calculate estimated tax payments

If you need any help about self-employment taxes, let me know. I will be more than happy to further assist you

Again this is not for the year only Quarterly estimate. I include payments I make on my assets and your Tax estimator doesn't count them as an expense but doesn't deduct them at all result has gotten even worse. I am now down to 3k profit and I still owe more Tax's then I even made in profit this is impossible. has me oweing over 10k for the first Quarter of 2020 with 3k income. Go figure also would be nice to figure this asset's depreciation as it is a Truck but as it is used Commercially licensed 100% business use it must be classified as a fixed asset with a fixed depreciation not a mileage write off. Id like to be able to also include and track my periderm. Those 2 days I could be working making money not doing a quarterly Tax filing like it was the end of the year. from what I have seen your quarterly estimator doesn't work as advertised neither does the ability to track expenses and write offs. This book system isn't really much more then a limited ledger. as it doesn't track a lot of expenses. as it is your quarterly estimator not being able to track or calculate these deductions would put me paying tens of thousands of dollars I don't owe that could be used as working capitol already has me paying over 10k I don't owe and its only first quarter..

As soon as I enter more expense's it takes them off of my net income but doesn't remove them from my Quarterly tax estimate. also I need to be able to track a fixed assets depreciation and periderm both seem to be unable to do. as my fixed depreciation of $1320.00 per month/ Quarter $3960.00 and periderm $50 per day $4500 per quarter. is a huge overpayment I would be making well over $10,000 in over payment each quarter. I am down to 3k income and owing over $10,000 in Tax's first quarter. This is wrong tax rate on $3,000 is not $10,000 now my tax rate is over 300% of my income. I am ready to quit my job I am not paying the IRS over 3x more money then I make. Your estimator is stuck working on gross income and failing to recognize business expense's then calculate based on net income. and it cant track or work on deduction items like the ones I mentioned instead those would have to be done at end of year when done on TurboTax. simply leaving me over paying on tens of thousands of dollars I shouldn't be paying tax's on.     

Hey, @hungryhorse.

Thank you for reaching out to the Community.

As the actual data comes in, we will use more of the actual data instead of our projections. You can change the estimated taxes manually in QuickBooks Self-Employed by going to our projections from the Quarterly Estimated Taxes page.

For more information about depreciating assets in QuickBooks Self-Employed, you can refer back to this article for help: How we calculate estimated tax payments.

Also, to ensure that your books are accurate, I suggest reaching out to an accountant as well.

If you have any more questions or concerns, please don't hesitate to reach back out. Have a good weekend!

Hello, I know this thread is older but were you able to get this resolved? My estimated taxes increased 3x the amount between Q1 and Q2 and I made about the same amount each quarter. It was ridiculous how high it went up and I can't seem to find an answer as to why. I freaked out and paid it but now my Q3 estimated tax is showing up even higher and I'm projected to make significantly less this quarter.  Any help would be appreciated 

Hello, @TheAcuDoc.

I'll share insights on how QuickBooks Self-Employed (QBSE) calculates your taxes and what you can do to get a more accurate estimate so you can make quarterly payments accordingly.

QBSE calculates your estimated federal income and self-employment taxes by applying income tax rates to your total taxable profit from your business plus any personal income you entered and then by including Social Security and Medicare tax rates. 

That said, I'd recommend adding all of your business income and expenses and categorizing them in QuickBooks. Then, make sure you fill out your tax profile with your income from outside of your business that's taxed at ordinary income rates (such as wages, salary, etc.) on the Tax Estimate page. 

Please see this article to learn more about what federal self-employment taxes are and how QBSE helps you estimate your estimated taxes: Estimate your income tax in QuickBooks Self-Employed.

After your taxes are calculated, make your quarterly federal estimated tax payments. You may want to check out this article for the step-by-step guide: Pay federal estimated quarterly taxes in QuickBooks Self-Employed.

Please let me know if you have other concerns about estimated taxes in QBSE. You can drop a comment below, and I'll gladly help. Take care, @TheAcuDoc.