Dave Ramsey

Shut up.

Yeah.

So how much to set aside if you're self-employed?

Yeah, the quarterly estimate is a one-page document.

How much were the revenues for my business?

How much minus the expenses for my business equals the profit for my business times tax bracket?

And you have to pay that once a quarter if you're self-employed.

If you don't, you're going to get penalties and interest on that after the first year.

First year, they give you a pass, which also leads people into doing stupid stuff like not paying their taxes.

But you need to do your quarterly estimates.

And it's really not rocket surgery to figure this out.

It's not that hard.

So you just sit down and go, okay, the business made $100,000, and we spent $90,000, so our taxable income is $10,000 on the profit, and we're in a 25% bracket, so I'm going to set aside $2,500, and I'm going to send that in with my quarterly estimates, and then that has the same effect at the end of the year as those of you that have a W-2 job where you're withholding automatically out of your check.

The only difference is you actually have to send the money in, which pisses you off more because you actually know that you're paying taxes.

When you have it withheld from your check, it's out of sight, out of mind.

You don't think about it.

So about a fourth, about a fourth of your profits.

So if you're running a business, you're on a separate checking account, whatever's left in that account, if you pay only business expenses out of that account, which is what you should do, and you only put business income in that account, which is what you should do, what's left in there is profit.

And so if you pull $5,000 out, you should set aside $1,250 and only pull $3,750 into your checking account and set aside $1,250 so that when you're ready to do your quarterly estimates, you're ready to do your quarterly estimates.

Standard deduction versus itemizing.