Ask an Accountant: How much to save for taxes

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It’s tax time! Mom on Dealz’s  “Ask An Accountant” series should help with many questions that may arise. Remember, if you have a tax question, email Mister Mom on Dealz  who is an experienced accountant at cjwtaxpro@gmail.com.

Question:
Is there a specific amount I should be saving for taxes at the end of the year?

Answer:

Assuming you are set up as an LLC or sole proprietor, you should be setting aside approximately 15% of your net profits. This will at least cover the Self-Employment taxes on the profits. The amount of profit also needs to be added to your income, and income tax will need to be calculated on the additional amount based on your individual tax rates.

Please keep in mind this post is for informational purposes only and answers given are very general. Do not rely on this column for definite tax answers as many things depend on individual circumstances. Please contact your personal accountant or financial advisor for your particular situation.

photo credit: austinpost.org

IRS Circular 230 Notice: Any U.S. tax advice in this written or electronic communication was not intended or written to be used, and it cannot be used by the taxpayer, for the purpose of avoiding any penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions

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About the author: I’m a 30-something mom to three, brand ambassador. content creator, social media maven, blogger extraordinaire, earth lover, butcher, baker, candlestick maker (or something along those lines) – love word games, crafting, cake decorating or shooting pictures.

3 comments… add one

  • 15% net or gross? Does this include income from any other sources?

    Reply
  • I’m still making too little to pay…we get money back each year instead. =/

    Reply
  • Ughh… tax time again. Any tip is useful. Thanks.

    Reply

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