One of the most common questions business owners ask is how much to set aside for taxes. Many people come to us feeling unsure, overwhelmed, or caught off guard by their tax bill—not because they did anything wrong, but because no one ever showed them how to plan for taxes throughout the year.
Once we help clients put a simple system in place, everything changes. They feel more confident, more prepared, and more in control of their finances. You can use the same approach in your business.
How Much to Set Aside for Taxes Each Month
A common starting point is setting aside 15%–30% of every payment you receive, depending on your income level and business structure.
For example:
- If your business brings in $8,000 in a month
- And you set aside 20%
- You would immediately save $1,600 for taxes
Doing this consistently prevents the stress of trying to come up with a large lump sum when tax deadlines arrive.
Adjust How Much You Set Aside for Taxes as Income Changes
Reviewing your financial reports monthly helps you stay flexible and prepared.
If your revenue usually averages $5,000 per month but jumps to $12,000 during a busy season, increasing how much you set aside for taxes in those higher-income months creates a stronger buffer. This is a key part of smart business tax planning—your tax savings should reflect what your business is actually earning.
Separate Your Tax Savings From Your Operating Money
One of the most effective habits we recommend is creating a separate bank account specifically for tax savings.
Before doing this, many business owners accidentally spend money they intended to save for taxes. Once tax funds are kept separate from operating expenses, discipline becomes much easier—and surprises become far less likely.
This simple separation alone can dramatically reduce stress around small business taxes.
Setting Aside Money for Taxes Builds Financial Stability
Setting aside money for taxes isn’t just about compliance—it’s about building predictability and peace of mind as your business grows.
When you know your tax money is already accounted for:
Tax season becomes manageable instead of overwhelming
Cash flow becomes clearer
Financial decisions feel less stressful
Want help staying organized and prepared for tax season year-round?
We help business owners keep their books accurate, plan ahead for taxes, and build systems that reduce stress and improve financial clarity. Reach out if you’d like us to take the pressure of business finances off your plate. Book today.