Comments on: How to Budget for Business Taxes

By: Death and taxes « Jennifer Larson, Writer at Large

Death and taxes « Jennifer Larson, Writer at Large — Mon, 06 Apr 2009 19:51:02 +0000

[...] has a good series of articles right now about dealing with taxes as a freelancer. This one will give you a good introduction to how to get a handle on it. I need to re-read it and commit it to memory myself. Luckily, we [...]

By: Allison Boyer

Allison Boyer — Sun, 05 Apr 2009 18:34:22 +0000

Putting the extra in an IRA is an awesome idea!

By: Jennifer Roland

Jennifer Roland — Sat, 04 Apr 2009 00:13:52 +0000

Thanks. I can’t wait!

By: Elaine

Elaine — Thu, 02 Apr 2009 21:21:50 +0000

me too.
Back when I was really making money at this (sigh) I made it a business rule to put away 30% of every check I received. I then bought short term CD’s to generate some income from the deposits until the tax payments come up. (My accountant figured out how much I had to send in quarterly, based on my income the year before.) At the end of the tax year, if there was more money in the account than I needed to pay my taxes, I could then use those funds as my IRA contribution for the year. ( Now if only that was not disappearing!)

By: Anthony Williams

Anthony Williams — Thu, 02 Apr 2009 14:41:45 +0000

I always do more or less what you’re suggesting here. I determine an approximate percentage which should be guaranteed to cover taxes (and therefore is a slight overestimate) and then take that percentage off every months profit (income minus tax-deductable expenses) and put that aside in a “tax fund”. Anything left over can then be spent how I see fit. When the tax bill comes I can then just pay it from the money set-aside for the purpose. Usually I have set aside more than required (just in case), so when the tax bill comes I actually get a *bonus* for myself from the surplus.

By: Allison Boyer

Allison Boyer — Wed, 01 Apr 2009 22:24:56 +0000

Jennifer – absolutely! I’ll put together the information and post about it this weekend!

By: Jennifer Roland

Jennifer Roland — Wed, 01 Apr 2009 16:54:19 +0000

Could you do a follow-up article on quarterlies? A lot of new and accidental freelancers would appreciate some info about when you need to pay quarterlies, how you do it, when you need professional advice from a business banker or an accountant–that sort of thing.