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A chat with a retired graphic designer at the library coffee shop changed how I save for taxes
I was working on my laptop at the library coffee shop in Boise last month, and an older guy saw my QuickBooks open. He leaned over and said, 'You're putting 25% aside, right? I learned the hard way.' He told me he used to freelance and got hit with a $4,000 tax bill one year because he only saved 15%. He showed me his old notebook where he tracked every project's income and set aside the tax money immediately into a separate account. Now I open a new savings account for each big job's tax portion. Does anyone else have a specific system to make sure that money is truly untouchable?
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daniel3918d ago
Honestly, the separate account per job is smart, but it's the timing that gets me. I don't just move the money right away. I wait until the client's payment actually clears my bank. That way I'm only setting aside real money, not money I might still be waiting on. It stops me from feeling like I have more cash than I do. I learned that after a big check bounced once and my tax math was all wrong for a week.
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miles_chen7d ago
Started using a second checking account just for tax money, so it's out of sight when I pay my regular bills. Seeing that lower balance keeps me honest.
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