Estimated Federal taxes

Hello there, EBC2024.

I am here to help you with your question regarding estimated federal taxes.

Based on the information you provided, it looks like you're a self-employed individual. If you're using QuickBooks Online (QBO), that may not be the right product for you. 

You may consider checking out the features of QuickBooks Self-Employed (QBSE), now called QuickBooks Solopreneur. This software is specifically designed to help you keep track of your business-related transactions and make quarterly estimated tax payments. You can also file your Schedule C along with your annual tax return (1040). If you want to learn more about this software, you can check out this article: Overview of QuickBooks Self-Employed.

Regarding how QuickBooks calculates your estimated taxes, this is calculated by applying income tax rates to your total self-employment taxable profit from your business plus any personal income you entered from outside your business. Self-employment tax is calculated by applying Social Security and Medicare tax rates to your business's taxable profit. To know more about this, check out this article: Automatically estimate your income tax in QuickBooks Self-Employed.

In case you decide to switch to QuickBooks Solopreneur, it is recommended to cancel your QBO account to avoid duplicate subscription charges. 

If you need further assistance with your tax payments in QuickBooks, please don't hesitate to ask. I am always ready to help you. Have a great day!

@EBC2024 

"Should I estimate my Estimated Federal Tax quarterly payments based on my Gross Profit or Net Income?"

Neither.  It's best to use the 2024 Estimated Tax Worksheet found in the IRS Form 1040-ES Instructions, page 8.  If you base it off net income (better than gross profit), you're missing personal deductions and any effects of tax credits, self-employment tax, etc.  IMO, if you pay 25% of net income in federal estimated income tax, you will be overpaying unless you're making significant ordinary income.  To give you an idea, a taxpayer with a filing status of single, taking the standard deduction, with ordinary income of  $250K, pays ~22% in federal income tax.  The same taxpayer making $100K, pays only ~14% in federal income tax.  This is based on 2023 tax rates.       

After an hour on the phone and multiple transfers, I have been told that Soloprenuer is not a fully launched product, no one has been trained on it, and questions I have regarding a switch from Simple Start cannot be answered at this time.

Amazing.