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Why does nobody talk about the tax hit from big one-off payments?
I used to treat a $5,000 project payout like a windfall and spend most of it. Now I put 40% straight into a separate savings account the day it clears, because I got burned last April owing way more than I saved. How do you guys handle the tax part for those single big checks?
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ray6135mo ago
Yeah, that "owing way more than I saved" feeling is the worst. I got hit with that too. What finally worked for me was opening a second business checking account just for taxes. Every time a client payment lands, I immediately transfer a flat 30% into that tax account. It's out of sight, and I can't spend what I don't see in my main account. It's not perfect, but it keeps me from getting a scary bill in April.
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shanes665mo ago
Smart move, I started doing that after a brutal tax year too.
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blair_torres705mo ago
Shanes66, I just pay quarterly taxes so the money's already gone.
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ben_fisher4mo ago
Right, because missing out on earning more really sounds like a huge problem here.
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