Ask Maxi · Estimated taxes
How much should I set aside for taxes?
Put 5 to 8 percent of every payment you receive into a separate tax savings account, the day it lands. Every payment, before you spend any of it.
We go by what comes in rather than by profit because profit is hard to see in the moment. You know what a client just paid you. You usually do not know your profit until the books are done.
5 to 8 percent is the starting point. Where you land in that range depends on your expenses, whether a spouse has withholding, and how your year is going. Florida has no state income tax, which helps. We check the balance against your real numbers each quarter and raise it if it is running short.
The habit matters more than the exact number. A separate account with an automatic transfer works. Watching your checking balance and hoping does not.
If you are on a Cadence plan, the app keeps a running estimate as you add income and expenses, so you can see whether what you have set aside is keeping up.
Want us to handle this for you? Bookkeeping + Tax →