Set Aside Money for Taxes From Day One if You Are Self-Employed

When you are employed, taxes are invisible — your employer withholds them before you ever see the money. When you are self-employed, every dollar hits your account looking like it belongs to you. It does not. Set aside twenty-five to thirty percent of every payment you receive into a separate tax account immediately. This money was never yours to spend.

The most common financial crisis among freelancers and self-employed people is the tax bill they did not prepare for. By the time April arrives, the money has long been spent and the surprise feels catastrophic. Treat tax savings like a bill that is due the moment you get paid, and tax season becomes a non-event instead of an emergency.