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ravensburgerpuzzle
Level 1

Quarterly Estimated Federal Tax Payments

I've had very wild (over)estimates for my quarterly payments for a couple years now on QuickBooks for Self-Employed.

  • I'm self-employed, my spouse is W2. 
  • My tax profile says that my personal exemption is $0, and does not allow for editing.
  • We have no dependents.
  • I've set up my tax profile both including his income and not. Including his income adds much higher numbers to our estimated taxes, though his are coming out of his paycheck directly.
  • I categorize all my transactions. Most are business, as only my business checking and business CC are connected.

 

For the past couple years, I've made general estimates on my quarterly payments instead of using Quickbooks numbers. I've varied on under/over by about 1k (some years a refund, some years owing). Paying Quickbooks estimates would lead to about a 5-10k overpayment a year. Using my method is much better for me because I get to keep more of my income when it's needed, rather than getting a massive refund every year. Still, I hate that Quickbooks says I owe $12k when I would pay around 3-4k for a quarter. What could be the issue?

2 Comments 2
ReymondO
QuickBooks Team

Quarterly Estimated Federal Tax Payments

Hi there, @ravensburgerpuzzle.

 

QuickBooks Self-Employed estimates federal tax payments based on your self-employed income, deductions, predicted future income for the year, and tax profile.

 

  • QuickBooks adds up your self-employed income. Then it subtracts any expenses and deductions you can write off. This gives you your business's profit.
  • QuickBooks uses your current profits to estimate your income for the rest of the year.
  • QuickBooks asks about your tax situation when you first sign up. This creates your tax profile. We adjust for already taxed household income (for example, if you or your spouse is also a W-2 employee) and give you standard deductions.

 

Our goal is for you to owe no taxes for your self-employment work at the end of the year. If you pay the estimated amounts each quarter, you should owe little or nothing.

 

Since you're estimated tax amount is greater than you're expected, I'd recommend reaching out to our phone support. This way, they can review your account and tax calculations. Here's how:
 

  1. Click the Help menu in the upper-right hand corner and click Talk to a human.
  2. Type in "Talk to a human", then press Enter.
  3. Look for I still need a human and click on it.
  4. Select Get help from a human.
  5. Choose between Chat with usSchedule an appointment, or Have us call you.

 

Please check out our support hours to ensure that we address your concerns on time.

 

Additionally, QuickBooks only calculates federal estimated quarterly taxes. It doesn't calculate other types of taxes. For more details, you can check out this article: What QuickBooks Self-Employed doesn't calculate.

 

Should you have any follow-up questions or concerns, don't hesitate to post again here in the Community or leave a comment on this thread. Take care and have a good one.

ravensburgerpuzzle
Level 1

Quarterly Estimated Federal Tax Payments

Hi Reymond-

 

I finally had time to get on the phone today with someone at QuickBooks Support, but they could not solve my issue. My taxes are still estimating around 10k over for the annual total. Even when I updated my tax profile with information that was incorrect, but would greatly affect my tax liability (8 dependents, filing single, HoH), it only took my taxes down a couple thousand, which is know is also not accurate. I am not able to reset the quarterly projections even when I tried. Unfortunately, there seems to be something very stuck with my profile. I tried entering a transaction applied to last year's taxes (which were about a 4k overestimation) to make sure it wasn't a strange carryover--even when my 2020 tax estimate zeroed out, it did not affect my 2021 estimation.

They suggested to call by in case my amount is incorrect per IRS at the end of the year so they could escalate my problem. Based on my previous years personal estimations vs QuickBooks, and the IRS tax bracket information provided publicly, it is absolutely still about a 10k over-estimation.

 

I'm really disappointed I cannot use this feature as it's part of a paid service. Any further suggestions?

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