Hey Reader,

In the US, we're less than 6 weeks out from the personal tax filing deadline of April 15. Sole proprietorships & C-corp filings are also due then. S-corps & partnerships have even less time (March 17).

That means it's probably too late to save much for 2024 tax payments... so let's do better for the 2025 tax year by making a plan today!

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PREPARE FOR 2025 BUSINESS TAXES

1. From your bookkeeping software (you ARE doing bookkeeping, right??), create a spreadsheet that shows income & expenses by month for 2024
2. Calculate average monthly revenue *the money your business brings in, not net income
3. Multiply average monthly revenue by 30%. This is a (super rough) starting point for your tax burden on a monthly basis.
4. Mmultiply that monthly 30% number by 12 - this is approximately how much you should set aside for 2025 business income taxes. How does this number compare to what your business paid and/or owed for 2024 taxes?
5. Adjust the total amount to save up or down based on 2024 taxes paid + estimates of changes in 2025.
6. Looking at 2024 numbers still, evaluate whether you can save that 30% number each month (as in, transfer that money to a savings account & not touch it for a year). If you can't, why not?
7. Play with the numbers - raising rates or taking on new clients, cutting costs, or changing the software/providers you currently use - until you find a way to make saving that 30% number possible. Some months are better than others, which is why we're using the average revenue.
8. Work on hitting that monthly savings goal. Some people like to transfer 30% of each customer payment received to savings or one lump sum at the beginning/end of each month. Make the transfers & budget adjustments based on what works for you & your business
9. Make a plan for spending any leftover savings to motivate you actually to set the funds aside
10. Let your tax preparer know your plan - if you need to make monthly estimated tax payments throughout the year, do so (rather than stockpiling the funds). If you're not advised to make estimated tax payments, hold on to the money until your 2025 tax return is completed.

👉 Still preparing for 2024 taxes? Grab our free tax prep pack to make sure you've got everything together.

👉 Need help with your backed-up bookkeeping? We can do that too! VIP Bookkeeping Weeks allow you to focus on doing what you do best while we do what we do best.

👉 We're also accepting new monthly bookkeeping clients - book a discovery call today!

Before you go, let's be friends! Find me on Facebook, Instagram, or Pinterest (all @ balancedfi)

Enjoy,

P.S. make your 2025 taxes less stressful by creating a savings plan today!

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