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?

4 comments

4 Comments

ray6131mo 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.

shanes661mo ago

Smart move, I started doing that after a brutal tax year too.

blair_torres701mo ago

Shanes66, I just pay quarterly taxes so the money's already gone.

ben_fisher1d agoMost Upvoted

Right, because missing out on earning more really sounds like a huge problem here.