Why are my quarterly amounts different on estimated taxes versus my profit and loss report?

You may have noticed that, in a few cases, the profit you see under your quarterly estimated taxes does not match what you see under the quarterly view of your profit and loss. The simple explanation is, the IRS uses odd time periods for each "quarter" of the tax year, where we default to the standard 3-month period definition.

Estimated taxes

Taking a look at the estimated tax report from Seller Ledger, you will see the following (using a sample data file:)

Note that Q1included the months of January through March. That matches what you would see in Q1 of your profit and loss.

But then things get weird. The IRS estimated tax quarters differ for the rest of the year.

Q2 only includes 2 months, which throws off the 3 months on Q3, and Q4 has 4 months. The P&L report contains exactly 3 months each quarter, in succession.

If you'd like more information on how it got this way, check out our blog post on the issue.