How Much Should You Save for Taxes? - Ep 174

Taxes are stressful for all of us, but especially business owners. So if you’re confused about how much you should be paying in taxes for your business, this episode is for you! Host Danielle Hayden simplifies the process of calculating estimated tax payments, explains why you should be saving more than these estimates, and clarifies the tax obligations of LLCs versus S Corps. You’ll learn how to embrace tax preparation for your business, including setting up a tax savings account and understanding your numbers. Tune in now for expert tax tips!

 

Key Takeaways:

• Calculate estimated taxes based on your business's net income from the previous year.

• Establish a tax reserve to cover potential growth and additional tax liabilities.

• Use a separate checking account for tax savings to avoid unintentional spending.

• LLCs and S Corps are taxed differently, so it’s important to understand the tax obligations of your business.

• The IRS requires S Corp business owners to take reasonable compensation before taking owner's draws.

 

Topics Discussed:

How to calculate your estimated taxes (1:12)

Why you need to save more than your estimated taxes (2:30)

LLC versus S Corp taxation (4:06)

Tax guidelines for owner’s draws (5:07)

Your responsibility as a business owner (9:25)

 

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