094R | Transitioning to Entrepreneurship | A Case Study in Estimated Taxes

094R | The logistics of estimating and paying taxes as an entrepreneur, Brad’s frugal win of the week, and emails from the ChooseFI community.

• Brad and Jonathan are at FinCon in Orlando, Fl.
• Brad describes his family’s frugal win of the week at Old Navy.
• Review of the tax implications of winning a non-cash prize.
• How do some entrepreneurs put themselves in a position to fail because of taxes?
• Case study: how to make estimated tax payments as a new entrepreneur.
• Brad wants to pay the least amount of money in taxes, but ensure that he definitely pays the minimum amount to avoid incurring penalties.
• • Knowing due dates and technicalities is important.
  • It’s key to have money set aside in case you do owe more at the end of the year.
• What is the safe harbor provision?
• If you have blended W2 and non-W2 incomes, you do have to estimate based on previous pay stubs.
• Why would someone owe payroll tax?
• Brad uses a different bank account to reserve money he thinks he’ll need for taxes, and uses an eftps.gov account to submit his taxes.
• It’s important to know that you’ll owe a lot of money on April 15 every year.
• Email from Ally reporting two life wins:
• • Keeping an inventory for what’s in her freezer by writing on the front like a white board.
  • Using checkboxes to keep track of the three things she accomplishes every day.
• Is FI getting to the UK?
• Playing with FIRE documentary has been submitted the film to Sundance.
• Scott, writes an email, to explain how pursuing financial independence and information from ChooseFI has changed his life.

Links:

“How to retire in your FORTIES without earning a fortune” – Daily Mail