Nickels, dimes, quarters
If you’re self-employed, the not-quite quarterly tax payment deadlines can be a pain (Jan. 15, April 15, June 15, Sept. 15, what?).
You need a surefire system to keep your tax savings on track—so you don’t end up owing penalties. Advice from our readers:
Make life less taxing
Kat Halsey, an L.A. artist, started taking credit card payments through ProPay about a year ago. “Those charges go straight to an online account, and that it has become my savings for both my taxes and my sales tax fees. Though I’m not earning interest, this system keeps my tax money separate from my business account—which prevents me from spending it.” Exactly.
Sharon Mathis, a digital photo retoucher in NYC and Philadelphia, socks away 30% of each payment into a designated tax account. “Thirty percent plays it safe, and I usually have money left over.” She also asked one client, who pays via direct deposit, to automatically deposit 30% of each check into that tax account for her. And they did. Sweet.
Suzanne Grossman, who teaches Love Your Job Search classes in New York, has a two-part system: She set up a separate ING account for taxes, and then linked her PayPal account, where she accepts class fees, to the ING account. “Then I just transfer 20 percent of my revenue to ING. It’s online, it’s done and I never have to think about it.” (Percentages vary, so check with your accountant.)