Did you promise yourself last year that you wouldn't wait again until April 15th to pay your self-employment taxes? Do you wait and use next year’s income to pay the prior year’s taxes? If you haven’t already started to set money aside for your year-end and quarterly tax payments, then today is the day!!!
Here are a few tips that could help get your thinking straight on this:
1) Set a Budget: Keeping a monthly budget can make a huge difference in whether or not you follow through on these promises to yourself. It's important to get all your numbers laid out so you can see exactly what you are doing and can make clear-headed decisions that won't make you an accomplice in your own pain and stress. Cash Liquidity is essential in a credit-poor economy, but you must plan ahead and budget to build up ample cash reserves. Writing on Home & Business Budgeting for the New Economy is a primary emphasis of Numbers Speak Louder Than Words.
2) Keep Your Numbers: Keeping your numbers on a monthly or weekly basis will free you up to not only save for your tax liability, but even more you will develop a keen awareness of the key indicators that could make or break your business. I can't stress it enough the importance of working towards having in-depth accounting. If you look only at the bottom line you will be missing out on the details that are specific to your business and industry.
3) Move Your Money: Transfer the apportioned amounts out of your operations/spending account RIGHT AWAY. Put it in an account that you won't touch until it's time to pay your taxes.
4) Get Help: Don’t do this alone. If this seems like a daunting situation, don’t do it alone. Get support-- voicing your goals and intentions to another human being increases the likelihood of success. “Book Ending” is a simple technique where you tell someone your goal or task before you start and then check back in after you have completed it.
Like it or not make payments or set aside this money as you go, so you won't get in a jam come April 15th. Drama and crisis is avoidable in this case (as it is in most cases)… not to mention the late fees and penalties.
I know it’s easy to say, but harder to do. Let this year be different.