GLINR Studios

METHODOLOGY

How safe-to-spend is calculated

Quarter's safe-to-spend number comes from deterministic math against published IRS bracket tables, not an AI guess. This page walks through exactly what goes into the calculation, what it deliberately leaves out, and a worked example with round numbers.

What goes in

The engine only needs three things: what you earned, how you file, and where you live. No spending history, no credit score, no manual budget categories.

  • Deposits. Every deposit into a linked bank account, or payout from Stripe, PayPal, or Square, is treated as income the moment it lands.
  • Filing status. The calculation is driven by your actual cumulative income for the year, applied against the correct marginal brackets for that filing status.
  • State. Your state of residence, matched against one of the state bracket tables Quarter ships with (Texas, Florida, California, New York, and Illinois in v1).

The seven-step engine

Every deposit runs through the same seven steps, in order, to arrive at a reserve amount and a safe-to-spend balance.

  1. 01

    Net SE income

    Gross income minus deductible expenses. Net earnings = 92.35% of that. The IRS self-employment income base.

  2. 02

    Self-employment tax

    15.3%: 12.4% Social Security (capped ~$176,100) + 2.9% Medicare (uncapped) + 0.9% over $200k single. Half of SE tax deducts above the line.

  3. 03

    Federal income tax

    2026 marginal brackets applied to (net minus half SE minus standard deduction minus 20% QBI). Marginal and cumulative effective rate both tracked.

  4. 04

    State tax

    State bracket tables for TX, FL, CA, NY, IL (TX/FL at 0%). Static yearly datasets. No live API dependency.

  5. 05

    Safe-harbor floor

    Lesser of 90% projected current-year tax or 100% prior-year (110% if prior AGI > $150k). Guarantees zero IRS underpayment penalty.

  6. 06

    Per-deposit reserve

    Each deposit multiplied by current blended effective rate. Rate rises with cumulative income. Late deposits self-correct early under-reserving automatically.

  7. 07

    Safe-to-spend

    Available balance minus tax reserve minus known obligations. The single number that answers: how much of this is actually mine today?

What Quarter doesn't know

  • This is not tax advice. Quarter produces estimates from deterministic math against published IRS tables and self-employment tax rates. A CPA reviews the methodology before launch, but it is not a substitute for professional advice. Always verify quarterly payment amounts with a tax professional.
  • It doesn't know about deductions or credits you haven't told it about. Home office expenses, retirement contributions, dependents, and other deductions only factor in once you enter them. Until then, the reserve is calculated on gross deposits minus the standard deduction and QBI.
  • It doesn't file anything on your behalf. Quarter exports a Schedule C-ready income and deduction summary for your CPA. It never submits a return or a payment for you.

A worked example

Example (illustrative, not a real customer): a Texas-based single filer earns $8,000 in a month from freelance client payments. Texas has no state income tax, so the reserve is federal plus self-employment tax only.

Monthly income$8,000
Self-employment tax reserve≈ $1,130
Federal income tax reserve≈ $585
Total tax reserve≈ $1,715
Safe-to-spend≈ $6,285

Rounded 2026 federal brackets, single filer, no state income tax. Actual numbers depend on your real filing status, deductions, and state. Not tax advice.

Want to see it with your own numbers? Try the safe-to-spend calculator