Most people don’t think about tax time until well… it’s tax time. However, a bit of planning and saving could save you a lot of stress and money when it’s time to file those taxes.
If you are making money, you will have to pay taxes. That’s the reality. Tax time can be a big stress for many people because they often don’t account for the money they will owe. I have come up with a few ways to help you plan and prepare so you are less likely to stress out.
1. Open a savings account and call it Tax savings. This account will be strictly for money that you owe for taxes. Each time you get paid, before you do anything with it, put 15% into this tax savings account. Leave the money in there! That is key. The beauty of the Tax Savings account is it takes the burden off wondering where you are going to get the money to pay your taxes. It will already be there. And if you take it out the tax savings money as soon as you get paid, you won’t have time to spend it. Remember, the more money you make, the more you owe, so make sure to put in 15% of whatever you earn.
2. At least once a week move money over the account. Once it’s in there, you don’t have to worry that you will spend it.
3. Don’t wait until the last month to start saving. Start putting money aside right away. The more money you have set aside now, the less stressful it will be when it comes time to file.
Saving now for tax time will take the stress and chaos out of it. If you end up with more money in the account than you need that’s even better! Use it for the year after (money doesn’t go bad) or give yourself a nice end of year BONUS!
Once you have money set aside you can concentrate on making more money and growing your business.