Taxes – Don’t Wait Until Next Year to Worry About Them!


By Cindy Thomason

bookskeep

www.bookskeep.com


We made it past April 15th, let’s bury our head in the sand and not worry about taxes until next year. Doesn’t that sound grand? Okay, but we can’t take a chance on it all just working out, so let’s be sure we have a plan that requires minimum attention throughout the year. Profit First gives you an easy framework to follow by using a separate bank account and allocating funds throughout the year for taxes. This is how it works.

First, the standard Profit First bank account we call the Tax account is for income tax only. It is the account that you will allocate money to twice a month. The amount of your allocation is 15% of your real revenue. Real revenue is not your total sales, it is your cash receipts less any cash spent on inventory or other cost of goods sold type activity. This 15% of your current activity should set you up to have an adequate amount set aside come tax time.

If you are paying quarterly estimated taxes for your business, the funds in this bank account will be used to pay the estimated taxes. There are a few twists to note. First, your sales this year may be significantly different than last year. This can create a couple of scenarios that require upfront planning.

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Cindy Thomason

Founder & President of Bookskeep as well as a licensed CPA. Bookskeep is a small business partner that enables growing businesses to scale to the next level and move from startup to sustaining and thriving. Bookskeep provides the complete package for planning, building, and maintaining financial stability and growth. bookskeep.com

By |2019-05-17T08:04:37-05:00May 17th, 2019|Latest Articles|