Setting aside money for taxes

Question

Anyone else freelance and have trouble setting aside money for taxes? I know I'll owe about 30% of every freelance check I receive, but I don't actually move that money over into a separate account, I just mentally note it...which seems kinda dumb now. What do you all do?

christinaojeda90 · Answer

Definitely set money aside in a different account! I've switched to Simple for banking and they let you separate all of your goals/expenses in your bank account. It's pretty neat. Also tracking all of your income/expenses in Quickbooks self-employed is also super helpful!

Anonymous · Answer

Echoing the note above! I really recommend setting money aside in a separate bank account. Mentally noting it leaves room for underestimating and can put you in a tough financial spot come tax season.

SShep · Answer

Ugh, taxes are the worst and I am the worst at setting money aside for them. It's also difficult if you aren't sure how much you'll pull in billing. What I've done this year was send an entire client's payment into my savings account so I would 'forget about it,' as Casey recommends. I will probably owe a bit more, but with the big chunk waiting for me it hopefully won't be as painful when the bill comes due.

Setting aside money for taxes

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