# Calculate Quarterly Estimated Taxes From Your Deposits

- Author: CheapBankConvert (https://cheapbankconvert.com)
- Published: 2026-10-17
- Category: Tax time on a budget
- Canonical: https://cheapbankconvert.com/blog/calculate-quarterly-estimated-taxes

> Calculate quarterly estimated taxes from your bank deposits and expenses so far, with a free sheet and the safe-harbor amounts to know.
To calculate quarterly estimated taxes, add up the business deposits that reached your bank account this quarter, subtract the business expenses paid, and set aside a share of that profit for tax. Then check the result against the safe-harbor amount based on last year's return, and pay whichever figure you are comfortable with by the due date.

## Who needs to calculate quarterly estimated taxes?

Quarterly estimated taxes are payments you send the IRS during the year on income that has no tax withheld, such as freelance fees, rent or investment gains. The IRS page on [estimated taxes for individuals](https://www.irs.gov/businesses/small-businesses-self-employed/estimated-taxes) says you generally have to pay them if you expect to owe $1,000 or more when you file.

Most people who land in this group are self-employed. A designer paid by invoice, a driver paid by an app, a landlord collecting rent and a consultant with a few clients all receive money with nothing taken out. The same IRS page notes that estimated tax covers self-employment tax as well as income tax, which is why the bill can be larger than people expect.

Wage earners can be in the group too. A salaried person with a side business may owe on the side income. One fix is to raise paycheck withholding to cover it, which avoids separate payments altogether. Another is to pay estimates just for the side income.

## Quarterly estimated tax due dates for the 2026 tax year

The four payments for the 2026 tax year are due on April 15, 2026, June 15, 2026, September 15, 2026 and January 15, 2027, according to [IRS Publication 505 on tax withholding and estimated tax](https://www.irs.gov/publications/p505). The periods are not equal quarters, so the June payment covers only two months of income.

The uneven periods trip people up. The first payment covers January through March. The second covers April and May. The third covers June through August. The fourth covers September through December. If you build your sheet on calendar quarters, the second and third payments will be based on the wrong months.

When a due date lands on a weekend or holiday, Publication 505 moves it to the next business day. Put all four dates in your calendar in January, with a reminder a week early so there is time to pull the statements.

## Turning bank deposits and expenses into a quarter's profit

A quarter's profit is business income received in the period minus business costs paid in the period. Your bank statement holds both, but not cleanly: deposits include transfers and refunds, and debits include personal spending. Sort the rows into income, expense and ignore before you add anything up.

Start with deposits. Keep client payments, platform payouts and rent received. Leave out transfers from your own savings, loan money, refunds of purchases and gifts. If a platform pays you after taking its fee, the deposit is the net amount; record the fee as an expense only if you are using the gross figure from the platform's report.

Then the debits. Keep the costs of running the business: software, supplies, advertising, contract help, business insurance, a share of the phone. Leave out personal shopping, your own tax payments and card payments, which are transfers. A [tax deduction tracker spreadsheet filled from statements](/blog/tax-deduction-tracker-spreadsheet) gives you a ready list of categories to tag these rows with, and the same tags feed this sheet.

Getting the rows is the slow part when the bank only offers PDF statements. Many banks let you download a CSV of recent activity; if yours is PNC, [downloading PNC statements and activity](/blog/download-pnc-statements) walks through where those files live. For PDFs you cannot export, CheapBankConvert is being built to turn one statement into CSV or Excel rows for a one-time fee, with two pages shown free. It has not opened yet; the [CheapBankConvert homepage](/) explains the early prices.

## A worked quarterly estimated tax sheet from one quarter of deposits

The sheet turns the quarter's rows into a payment in five lines: business deposits, minus non-income deposits, minus expenses, equals profit, times your set-aside rate. The set-aside rate is your own estimate of the share of profit that goes to income tax and self-employment tax combined. Use last year's return to choose it.

The table below is a worked example for the first payment period, January through March. Every figure, including the 28% set-aside rate, is an example and not a rate for your situation.

| Line | Source on the statement | Example amount |
| --- | --- | ---: |
| All deposits, Jan to Mar | Credits column, business checking | 18,400.00 |
| Less: transfer from savings and one refund | Deposits tagged "ignore" | 900.00 |
| Business income | Line 1 minus line 2 | 17,500.00 |
| Less: business expenses paid | Debits tagged with a business category | 3,100.00 |
| Profit for the period | Line 3 minus line 4 | 14,400.00 |
| Set-aside rate (example) | Your own estimate | 28% |
| Estimated payment | Line 5 times line 6 | 4,032.00 |

In the spreadsheet, each line is one formula. If column E holds amounts and column F holds tags, business income is `=SUMIFS(E:E, F:F, "income")` and expenses are `=SUMIFS(E:E, F:F, "expense")`. Profit and payment follow by subtraction and multiplication.

For the second period, do not start from zero. Add April and May to the year so far, work out the total set-aside for January through May, and subtract the $4,032 already paid. That keeps a slow spring or a big March invoice from throwing the later payments off.

### Picking a set-aside rate

To choose a rate, divide last year's total tax by last year's business profit. If that came to 26%, a rate of 26% to 30% is a reasonable place to start. A preparer can give you a better figure. The IRS points individuals to Form 1040-ES for the full calculation, and the worksheet there accounts for credits and deductions a profit sheet ignores.

## Which safe-harbor amount protects your estimated tax payments?

A safe harbor is a payment level that protects you from the underpayment penalty even if you end up owing more. The IRS estimated tax page names two: paying at least 90% of this year's tax, or 100% of the tax shown on last year's return. The prior-year figure is the easier one to hit, because you already know it.

Publication 505 adds a rule for higher earners. If your adjusted gross income for the prior year was more than $150,000, or $75,000 if married filing separately this year, use 110% of last year's tax instead of 100%. The prior-year return must also cover a full twelve months.

Here is how that plays out with example numbers. Say last year's total tax was $14,000. At 100%, the safe harbor is $14,000 for the year, or $3,500 a payment. If last year's income was over $150,000, the safe harbor is $15,400, or $3,850 a payment. Your profit-based estimate from the sheet might be higher or lower than either.

That gives you a choice each quarter. Paying the safe-harbor amount means no penalty, even if a strong year leaves a large balance due in April. Paying from the profit sheet tracks what you really owe, so you have a smaller bill or a refund at filing, but no guarantee against the penalty if your estimate runs low. Many people pay the higher of the two.

Remember that withholding counts toward the safe harbor too: the IRS [Topic 306 on the underpayment penalty](https://www.irs.gov/taxtopics/tc306) measures withholding and estimated tax together. If a spouse has wages with tax withheld, that withholding reduces what the estimated payments need to cover.

## Estimated tax errors with lumpy deposits and mid-year changes

Uneven deposits cause most estimate errors. A freelancer who is paid one large invoice in March and little in the spring can overpay early and underpay late, or the reverse. The fix is to keep a year-to-date total, not four separate quarter totals, and to recompute after every large deposit.

Other errors come from the statement itself:

- **Counting transfers as income.** Moving money from savings to checking looks like a deposit. Tag it "ignore".
- **Missing a second account.** Payouts to a savings account or a payment app balance never reach checking. Include every account that receives business money.
- **Using the statement period.** A statement that runs from the 20th to the 19th splits a payment period. Filter by date, not by statement.
- **Forgetting the paid estimates.** Your own payments to the IRS show as debits. They are not business expenses.

A mid-year change, such as a new client, a lost contract or a large equipment purchase, is a reason to rebuild the rest of the year's payments. The four equal payments that the IRS describes are a default, not a rule you are stuck with once the first one is made.

## When a preparer should set your estimated tax payments

A preparer should set your payments when the set-aside rate is a guess rather than a figure from last year's return. That covers a first year of self-employment, a large gain from selling property or shares, income in several states, or a marriage. A sheet built on bank rows cannot see those effects.

The bank-row sheet still has a job in those years. It gives the preparer clean income and expense totals for each period, which is the slowest part of their work and the part you would otherwise pay for. If you are weighing whether to keep doing this yourself, [doing your own taxes or hiring an accountant](/blog/do-my-own-taxes-or-hire-an-accountant) compares the fees against the hours and the risk.

Whoever sets the numbers, keep the sheet and the statements behind each payment. When you file in April, the sum of the four payments goes on the return, and the sheet shows how you got each one.