If you are a sole proprietorship, your clients will pay you in pretax dollars, which mean you’ll be on the hook to pay Uncle Sam quarterly estimated taxes. Estimated is the key word here; it’s tough to predict how accurate these taxes are, especially during the first year or two of your business, so it’s a good idea to set aside 25% or so of each check you receive for the purpose of taxes. That way, if you end up with a larger- than- expected tax bill at the end of the year, you’ll have the funds to cover it.
« Back to Glossary Index
A simple 12-step plan to leap over the wealth gap once and for all.
