Introduction

I just got off a call this morning with another creator who has been filing taxes annually for the past two years. My rough calculation estimates that they paid close to $5,000 in excess fees and interest to the IRS.

You see, when I get on these calls with content creators or business owners, they always ask me questions like these:

• “What’s the best account I can have to save massively on taxes?”

• “Which accounts are completely tax-free?”

• “Can I use a trust to avoid taxes?”

My immediate response is “Are you paying taxes quarterly?” and they’ll usually respond “No.” So let’s get the basics down first before we look at other ways to optimize your taxes. In this article, I show you two ways to calculate your tax burden and give you a couple of tips on how to save big.

TLDR:

• A rule of thumb that is followed by many is to save 25-30% of your income.

• Save that amount in a high-yield savings account or money market fund.

• Every quarter (April 15, June 15, September 15, and January 15), make a payment to your quarterly tax bill.

• Do the same for your state tax; many states also require quarterly payments. Some states, like Arizona, have flat rates, which makes it super easy to calculate.</aside>

How to Calculate Your Quarterly Tax Bill

Let’s not gatekeep and get right into it. I’m going to start by explaining the process that a tax professional would go through, let’s call it method one. Next, I’ll dive into method 2, the one most creatives and small businesses like to use.

Method One: The Tax Professional’s Method

Any good tax professional will use the IRS Form 1040-ES. The IRS actually explains exactly how to use this form, which would help you arrive at an accurate tax estimate, but there are so many variables within this form that make it extremely difficult for the average creator to get a good estimate.

Look, if you’re a bit skilled when it comes to filing taxes, this form would be a good way to calculate that estimate for yourself, but realistically, we understand that most creators will default to method 2, so let’s stop wasting time.

Method Two: The Average Business Owner’s Method

You’ll often hear people say to save between 25-30% of your net income for taxes. This is just a rule of thumb and will likely lead you to either overpaying or underpaying. What this method does ensure, however, is an avoidance, or at least a decrease in interest and fees compared to someone only paying annually.

It’s January 13th, 2026, as I write this post, and Q4 tax estimates were just sent out to our creators from the CPA that we partner with. Most creators are around 30-35% effective tax rates, meaning they would’ve needed to save that percentage throughout the year. Now, these are businesses doing over $1 million in revenue, but I tell you this so you can see how the 25-30% is just an estimate.

Common mistakes creators make

Now, before I move on to showing you the system we use to save quarterly taxes for creatives, I want to walk you through some common mistakes that we see made. We hear so often that these penalties are minor in comparison, and while they may be, they can still add up to pretty significant chunks of change.

Mistake 1: No quarterly payments

The biggest mistake being made by creatives, freelancers, creators, and, honestly, a lot of regular small businesses is not making any quarterly tax payment. The penalty is basically an interest charge on the underpaid amount. Generally, the rate is the federal short-term rate plus 3%, compounded daily. In 2025, the underpayment interest rate was 7% for individuals.

Mistake 2: Forgetting state taxes

Making federal tax payments is just half of what needs to be done. Nine states don’t have a state tax, which include: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. Some of these do tax interest and dividends, which may require quarterly payments, however. As for the other 41 states, most are going to require quarterly payments. Don’t forget to pay these because they can add up.

Mistake 3: Mixing personal and business

I just wanted to throw this one in because I see it happen often, and it can lead to over-taxation or under-taxation because tracking becomes very messy.

How you can avoid any and all fees

You might be thinking to yourself now, “Well, how can I even be accurate in my calculation?” “What if I underpay? Would I still pay a penalty?” The short answer is yes, you will pay a fee even if you do your best to get close to the estimate, if that estimate is off.

‍So you’ll pay quarterly taxes on April 15, June 15, September 15, and January 15; that is step 1. Step 2 is paying what’s called the safe harbor amount. If you pay the safe harbor amount, you’ll avoid all fees and penalties. Here is how to calculate your safe harbor.

‍Calculate 90% of the tax owed for the current year. This is what we talked about at the beginning of the post, and we explained how this can be difficult to estimate. Oftentimes, people find option two better. Option 2 is to pay 100% of the tax shown on the prior year's tax return. This is the most common and easiest safe harbor to use because the prior year's liability is a known amount.

Now, for those with an Adjusted Gross Income (AGI) of more than $150,000, or $75,000 if married filing separately, you’ll need to pay 110% of the prior year's tax liability.

This doesn’t mean this is all you’ll owe, but this way you’ll ensure you’re not paying any unnecessary amounts to the IRS, and the remainder can be paid when you file your year-end return.

The system we use to help content creators and other creative businesses pay their quarterly tax bill

Step 1: Calculate the bill

The first thing we do is calculate the tax bill. You can do this using either the safe harbor method, the tax professional’s method, or the average business owner’s method.

Step 2: Split the bill

Now that you’ve calculated the total annual tax due, split it into 4 payments so we know how much we need to save every quarter.

Step 3: Set savings goals

Now you need to set quarterly savings goals. I use Monarch Money to track this for my clients, but you can use Notion, an Excel sheet, or just your notes app with reminders set.

Step 4: Open a high-yield savings account

Open an account that is actually going to earn you a decent percentage. We use Altruist, but you can use Capital One, SoFi, or your favorite bank. Just know that you should be getting about 3.20% as of January 13th, 2026.

‍Step 5: Automate and set reminders

Automate every transfer into this account, preferably at the beginning or end of the month. Then set up reminders to actually make the payment.