Quarterly Tax Planning for Small Business Owners: What to Do Every 90 Days
Most small business owners think about taxes once a year, in April, and pay more than they should as a result. A quarterly tax planning rhythm eliminates year-end surprises, captures deductions before they expire, and keeps your relationship with a CPA productive rather than reactive.
READY TO TAKE ACTION?
Use the free LaunchAdvisor checklist to track every step in this guide.
The Quick Answer
Set four 90-day tax check-ins on your calendar aligned with estimated payment deadlines: mid-April, mid-June, mid-September, and mid-January. Each check-in takes 30-60 minutes with your CPA or bookkeeper and covers three things: estimated payment calculation, deduction timing decisions, and any entity or strategy changes before the quarter closes.
Estimated Tax Payments: The Foundation
If you expect to owe $1,000 or more in federal income tax after withholding, you are required to make estimated quarterly payments. Missing them triggers an underpayment penalty — currently around 8% annualized.
2026 deadlines: April 15 (Q1), June 16 (Q2), September 15 (Q3), January 15, 2027 (Q4).
Two safe-harbor methods to avoid penalties: Pay 100% of last year's tax liability (110% if last year's AGI exceeded $150K), or pay 90% of the current year's expected tax. Most CPAs recommend the prior-year safe harbor method because it is predictable and requires no in-year estimation.
Q1 (January-March): Year-End Cleanup and Planning
Close your books for the prior year. Reconcile all accounts and confirm that all expenses are categorized correctly before you hand anything to your CPA.
Key decisions: confirm your entity election is still optimal (is this the year to make an S-Corp election?), review your home office deduction eligibility, confirm retirement contributions (SEP-IRA deadline is the extended filing deadline — October for most).
Action: Make Q1 estimated payment by April 15th.
Q2 (April-June): Mid-Year Projection
Run a year-to-date P&L and project full-year income based on current run rate. If income is tracking significantly higher or lower than last year, adjust your estimated payments accordingly.
Key decisions: large equipment purchases (Section 179 allows immediate expensing of qualifying assets), vehicle purchases or conversions to business use, prepaying Q3 business expenses that are due in July.
Action: Make Q2 estimated payment by June 16th.
Q3 (July-September): Deduction Timing
Q3 is the last clean opportunity to make decisions that affect the full year. After September, you have limited runway before year-end.
Key decisions: hire employees or contractors before year-end (payroll timing affects deductions), make retirement plan contributions (SEP-IRA contributions can be made after year-end but Solo 401k contributions must be elected by December 31), review accounts receivable for bad debt deductions.
Action: Make Q3 estimated payment by September 15th.
Q4 (October-December): Year-End Moves
Final sprint. All entity elections and most deduction timing decisions must be made before December 31st.
Key decisions: Solo 401k contribution election (must be established by December 31 for the current tax year), accelerate or defer income depending on which year is higher, make charitable contributions if that affects your itemized deduction calculation, purchase needed business assets before year-end.
Action: Make Q4 estimated payment by January 15th.
How to Get Started
Put the four estimated payment deadlines in your calendar today. Schedule a 30-minute quarterly check-in with your CPA or bookkeeper aligned to each deadline. Use the check-in to review current-year P&L, recalculate the estimated payment, and flag any deduction timing decisions for the next 90 days.
If you do not have a CPA, the IRS Free File Fillable Forms at irs.gov let you calculate and pay estimated taxes directly. For businesses with more than $50K in annual profit, a CPA relationship typically pays for itself in the first year.
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FREQUENTLY ASKED QUESTIONS
What if I cannot afford to pay estimated taxes?
Pay as much as you can and file on time. The underpayment penalty is calculated on the shortfall — paying half is better than paying nothing. If you expect to owe significantly, talk to a CPA about an installment agreement with the IRS.
Do I have to pay estimated taxes if I have a W-2 job too?
If you have a W-2 job with withholding, you may be able to increase your withholding allowances to cover business income taxes rather than making separate estimated payments. Ask your CPA which approach is cleaner for your situation.
Can I deduct my home office?
Yes, if you use the space regularly and exclusively for business. The simplified method allows $5 per square foot up to 300 square feet ($1,500 maximum). The regular method deducts actual expenses proportional to the office's share of your home's square footage — higher deduction but more documentation required.