5 Steps on How to Calculate Quarterly Taxes as a Content Creator

Being your own boss as a content creator is amazing, isn’t it? You get to create, connect with your audience, and build a business you’re passionate about. But with great freedom comes… taxes. If you’re earning money as a freelancer, influencer, or online entrepreneur, it’s recommended you pay quarterly taxes. Don’t worry — it’s not as intimidating as it sounds. 

What Are Quarterly Taxes? 

Quarterly taxes are estimated tax payments that self-employed individuals make four times a year. When you have a day job, your employer withholds taxes from your paychecks. But as a creator, it’s your responsibility to estimate how much you owe and send it to the IRS and your State of residence. 

Quarterly taxes cover two main components:

1. Income Tax: This is based on your earnings from your content creation or other freelance work.
2. Self-Employment Tax: This includes Social Security and Medicare taxes, which are typically split between employers and employees. As your own boss, you’re responsible for the full amount.

Do You Need to Pay Quarterly Taxes? 

Technically, you aren’t required to pay quarterly taxes. However, The IRS wants their money, and they want it now. If you choose not to pay quarterly taxes, the IRS can hit you with penalties and fees that will increase how much you pay when tax season rolls around. 

If you expect to owe $1,000 or more in taxes for the year, you should consider paying quarterly taxes. This includes taxes on income from:

• Sponsorships and brand deals
• Affiliate marketing payments
• Ad revenue
• Sales of products, courses, or merchandise

If you’re not sure whether this applies to you, consult a tax professional or err on the side of caution and pay quarterly.

How to Calculate Quarterly Taxes

Here’s how you can estimate and calculate your quarterly taxes as a content creator in just a few steps: 

Step 1: Estimate Your Total Income 

Start by figuring out how much money you expect to make this year. Look at your past earnings (if available) or create a realistic estimate based on your current income streams. 

For example, if you’ve been earning about $5,000 a month, your estimated annual income would be $60,000.

Step 2: Subtract Business Expenses

As a self-employed individual, you can deduct expenses that are directly related to your work. Common deductions for content creators include:

• Equipment (cameras, microphones, etc.)
• Software and subscriptions (editing tools, analytics platforms)
• Office space (home office deduction)
• Travel costs for content creation
• Internet and phone bills

Let’s say your business expenses for the year are $10,000. Subtract this from your income:

$60,000 – $10,000 = $50,000 taxable income. 

Step 3: Calculate Your Tax Liability

Now, you need to figure out how much tax you’ll owe on your taxable income. Federal income tax rates vary based on your tax bracket, and you’ll also need to account for self-employment tax, which is 15.3% (12.4% for Social Security and 2.9% for Medicare) up to a certain income threshold.

For example: 

• Federal income tax on $50,000 might be around 12-22%, depending on your filing status. For the math here, we’ll pick 15%: $50,000 x 15% = $7,500.
• Self-employment tax: $50,000 x 15.3% = $7,650.

Add these together to get your total estimated tax liability. That gives us $15,150 to use for our calculations. 

Step 4: Divide Into Quarterly Payments 

Once you know your estimated annual tax liability, divide it by four to calculate your quarterly payments:

$15,150 ÷ 4 = $3,787.50 per quarter. 

That’s the amount you’ll need to send to the IRS every three months.

Step 5: Check-in Each Quarter

If your income isn’t exactly what you anticipated, you may need to change the amount you send in each quarter. If you’re making more money than you planned, recalculate and send more that quarter. And if you’re making less, then you may decide to send less.

You want to strike a balance between sending enough to fulfill your tax obligations so you don’t have to pay a huge bill and penalties when you file your taxes and sending too much so you have less money to pay yourself and reinvest in your business through the year.

When Are Quarterly Taxes Due?

Mark your calendar with these quarterly tax deadlines:

• April 15: For income earned January 1 – March 31.
• June 15: For income earned April 1 – May 31.
• September 15: For income earned June 1 – August 31.
• January 15 (following year): For income earned September 1 – December 31.

If a deadline falls on a weekend or holiday, the due date will be the next business day. Download our handy calendar with all your important tax deadlines.

How to Pay Quarterly Taxes as a Content Creator

Paying your quarterly taxes is easy. You can:

• Use the IRS’s Direct Pay tool on their website
• Set up payments through the Electronic Federal Tax Payment System (EFTPS)
• Mail a check along with Form 1040-ES

Be sure to keep a record of your payments for your own tracking and future tax filings.

Tips for Simplifying the Process

1. Set Aside Money Regularly: Save 25-30% of your income for taxes so you’re always prepared.
2. Use Accounting Software: Tools like QuickBooks Online can help you track income, and expenses, and calculate taxes. (We can also help with this part of your business.) 

Conclusion

Quarterly taxes as a content creator might sound daunting at first, but once you understand the process, they’re just another part of being a successful content creator. By staying organized and proactive, you’ll avoid penalties, reduce stress, and keep more of what you earn. Want professional help? Book a call with us, and we can handle all your tax and bookkeeping needs so you can focus on your content!