How to Calculate and Pay Your Q3 Quarterly Taxes

Had a call with a prospect last week who's been guessing at quarterly taxes for three years.

We dug into his numbers. He's overpaid by $47,000.

That's $47,000 that could've been working in his business. Instead, the IRS has been using it as a zero-interest loan.

Here's the thing, quarterly taxes don't have to be complicated. You just need a system.

The Deadlines That Matter Right Now

Q3 taxes are due Sunday, September 15.

Screenshot these for next year:

• Q1: April 15
• Q2: June 16
• Q3: September 15
• Q4: January 15

Pay all your tax, but don’t leave Uncle Sam a tip. If you miss these payments, you’ll pay 7% interest PLUS your tax bill.

Pick Your Method (Most People Overthink This)

Option 1: Safe Harbor - What 80% of My Clients Use

Dead simple: Pay what you paid last year, divided by 4.
Made over $150k? Multiply by 1.1, then divide by 4.

You're bulletproof from penalties. Done.

Option 2: Current Year Method

Having a slower year? Calculate based on THIS year's projected income.
Keeps more cash in your business when you need it.

Option 3: Seasonal Method

Income all over the place? Pay based on actual quarterly earnings.
More paperwork, but perfect for seasonal businesses.

Option 4: The W-2 Catch-Up (The Strategy Most CPAs Miss)

Running an S-Corp? This is gold.
Increase your W-2 withholding in Q4. The IRS treats it like you paid evenly all year.

Missed all your quarterlies? One big December paycheck with massive withholding saves you from ALL penalties.

The QBI Bonus: Hit the magic ratio of 2/7 total income as W-2 wages. Now you've maximized your 20% QBI deduction too.

I've seen this single move save clients $20k+ in penalties and missed deductions.

How to Actually Send the Money

• IRS Direct Pay - 2 minutes, no account needed. (this is what I use)
• EFTPS - Set it and forget it.
• Check - Heads up: IRS is phasing these out. Switch to electronic before they force you to.

The Two Types of Business Owners I See

1. The Overpayer - Terrified of penalties, parks $50k with the IRS "just in case"
2. The Forgetter - Realizes in December they owe $30k + penalties.

Both are preventable.

My Dead Simple System

Open a tax savings account today.

Every deposit that hits your business account? Move 25-30% immediately.
Quarterly payment due? The money's already there. No stress, no scramble.

"But I Haven't Paid Anything This Year..."

Pay what you can TODAY.
7% interest on half the balance beats 7% interest on the full amount.

Every dollar you pay now is a dollar not accruing interest.

The IRS actually appreciates the effort.

S-Corp owner? Skip the scramble. Just max out your December payroll withholding. Problem solved.

Here's What Really Matters

The IRS isn't your enemy. But they're definitely not your savings account.
Every dollar sitting with them is a dollar not growing your business.

Set up the system once. Run it forever. Keep your money working where it belongs.
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Questions about your specific situation? Hit reply. I read everything.

If you want this handled completely? That's what we do at Better Bookkeeping.

Until next time,

Mitchell Baldridge, CPA, CFP® ​

P.S. Seriously, if you're reading this and haven't paid Q3 yet - stop what you're doing and pay something. Even $1,000 is better than zero. The peace of mind alone is worth it.

P.P.S. S-Corp owners - before you panic about missed quarterlies, remember you can fix everything with December payroll. It's not too late.

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