If Business Profit is Up Next Year
If your business activities are more profitable this year, be sure to hold back additional cash to cover the related tax due. For most people, a reasonable percentage to set aside is 40% of the increase in NET profit (revenue less expenses). For those taxpayers in the 33% or lower tax bracket, you should consider withholding 40% to 50%. This estimated percentage includes both Federal and State income taxes and self-employment taxes. If would like a more accurate percentage or are in the top tax bracket(s) you should contact us to prepare a tax projection for you.