Quarterly estimated tax payments spread your tax bill across the year instead of leaving it all until you file. Getting them roughly right protects your cash flow and can help you avoid an underpayment penalty. Collective gives you a tool to build your own estimate, so you can see the numbers behind it and adjust as your year changes.
This applies to both membership tiers. The calculation works the same way, but the business income figure comes from a different place: LLC tier members estimate business income from Schedule C profit, and S Corp tier members use business profit from their K-1. In both cases, other household income is factored in as well, because quarterly estimated tax is an individual tax rather than a business one.
Where to find your estimates
In your dashboard, go to Taxes, then Quarterly Estimates. The page is titled Quarterly payments and has two tabs.
- Estimated Taxes is your personal quarterly estimate, split between federal and your state.
- Fees and Franchise Taxes covers entity-level taxes your business owes, such as the DC Corporate Franchise Tax or California business taxes. These are separate from your personal estimate, and both can be due in the same quarter.
Your current estimate appears on the right, with Refine estimate to review or change it. Below that is Past payments, a history of everything you have recorded.
Choosing your calculation method
Select Refine estimate to walk through a short set of questions. The first asks which of two approaches matters more to you this quarter.
- "Keep my payments the same every quarter to avoid underpayment penalties" is the IRS safe harbor method. It uses your prior year tax, so your four payments stay level and predictable. Under current law, this generally shields you from an underpayment penalty if you pay 100% of last year's total tax, or 110% if your prior year adjusted gross income was above the higher-income threshold. Check the current threshold on IRS.gov, and note that it is lower if you file as married filing separately.
- "Don't pay more than my income projections but risk underpayment penalties" uses your actual numbers from this year instead of last year's return. It targets what you are likely to owe, which suits a year that looks different from the last one, or a year where last year's return is not filed yet. Because it relies on a projection, it carries more penalty risk if your income comes in higher than expected.
Both methods are permitted under IRS rules, and you can change your choice any time you refine your estimate. Which one fits depends on your situation. If you are not sure, your Collective team or your tax advisor can help you think it through.
As you answer, your estimate updates on the left, along with a Tax overview showing your annual tax liability, the share of it owed so far, tax withheld, and payments recorded.
Telling us about your business income
You'll be asked how your business income looked this quarter.
- About normal keeps the figure from your books.
- Higher or lower than usual opens a Total profit (revenue minus expenses) field so you can enter your own number.
That field asks for profit, not revenue. Entering gross revenue will inflate your estimate significantly.
Telling us about income outside your business
You'll be asked whether you have income from outside your business. Answering yes opens follow-up questions covering freelance work reported on a 1099, salary from another job reported on a W-2, and gains from investments you sold.
Anything you enter here is included in the calculation, which makes your effective tax rate more accurate. Anything you leave out is not, so it's worth completing these even if the amounts are small.
Telling us what you've already paid
Two questions reduce what is left to pay this quarter.
- Tax withheld from a paycheck. If you have a job where an employer takes tax out of each paycheck, answer yes and enter the year-to-date total from your most recent pay stub.
- Payments you've already made. Answering yes opens a short form where you can record a payment without leaving the flow, including the tax type, year, quarter, amount, date paid, and a receipt.
If you skip these, your estimate is calculated as though nothing has been paid. That is the most common reason an estimate looks higher than expected.
Your filing status and dependents
Your state of residence, filing status, and dependents all affect your tax rate. These aren't part of the question flow. Select Settings in the top right of the Quarterly payments page to open your Tax profile.
There you can update your state of residence and your federal filing status, tick My State filing status is different if your state status doesn't match your federal one, and add dependents. Each dependent needs a full name, date of birth, and Social Security number.
If any of these have changed, update them here and then run Refine estimate again.
Viewing your calculation totals
Select See calculation breakdown at any point to see every figure behind your estimate. It shows:
- Your estimate total, split by jurisdiction
- Income, separated into business figures and each category of outside income
- Tax already paid, covering both recorded quarterly payments and other withholding
- The tax rates applied, including your marginal rate, effective rate, and projected annual liability
If a number looks wrong, this is the fastest way to find which input is driving it.
Finishing and paying
Finalize my estimate becomes available once every question on the screen has an answer. Once you select it, your estimate splits into one card per jurisdiction, each with its own amount, due date, and progress bar.
From each card you can pay the tax authority directly, using Pay at IRS.gov or your state equivalent, or select Record payment to log a payment you've already made. Adjust details takes you back into the questions.
Federal estimated payments use your personal Social Security number rather than your business EIN, because this is an individual tax. Collective never debits your account, so every payment originates with you.
After paying, record the payment and attach your confirmation under Payment Receipt. That upload is what marks the amount as paid, and the progress bar fills as payments are recorded. Nothing syncs automatically from the IRS or your state, so a payment you don't record won't appear in your history.
Running it again
You can run Refine estimate as many times as you like, and your estimate reflects the most recent run. There's no need to contact us to have it recalculated. It's worth running again if your income is materially up or down, you've added an income stream, your filing status or dependents have changed, or you've moved states.
To review or update your estimate now, head to Taxes, then Quarterly Estimates in your Collective dashboard. If your situation is more complex than the question flow accounts for, reach out to your Collective team. They're here to help.
Disclaimer: The information contained in this article is provided for informational purposes only and should not be construed as legal, financial, or tax advice. It is not intended to be a substitute for obtaining legal, accounting, or other financial advice from an appropriate and/or licensed adviser, or for the purpose of avoiding U.S. Federal, state or local tax payments and penalties.