We all know that the IRS takes a bite out of our paychecks, and as a small business owner, there are so many taxes, fees and other financial regulations to consider – income tax (both federal and state); self-employment taxes; payroll taxes (and assuming you have employees to pay, all the more); property taxes; capital gains and dividend taxes (as applicable to any investments you may have made) – are all on your plate.
It can be overwhelming to deal with on your own.
Realistically, as a small business owner, you may have to count on setting aside 30-40 percent of your income to taxes: If you’re just starting out, it may be easier to do this as 30-40 percent of the total of each payment you receive. If you’ve recently begun turning a profit, you can set aside 30-40 percent of your monthly take. And if you’re fortunate enough to be consistently financially stable, take last year’s net income, divide it by four, and then take 30-40 percent of that number; plan on saving that amount quarterly.
These taxes vary both regionally and state-to-state, so it’s always a great idea to consult an expert. Dunham Tax Professionals is available to help you navigate these IRS tax shark-infested waters.