Set aside the right amount each month for income tax.
Estimated annual tax is spread evenly across the chosen months so it lands in a separate reserve account. Small businesses that skip tax reserves end up borrowing at tax time, so proportional saving avoids that shock.
Small Business Tax Reserve
Tax = profit x rate; reserve = tax / months
Tax = profit x rate; reserve = tax / months Estimated annual tax is spread evenly across the chosen months so it lands in a separate reserve account.
Small businesses that skip tax reserves end up borrowing at tax time, so proportional saving avoids that shock.
This calculator takes 3 inputs: Expected annual profit, Effective tax rate, Reserve over months. The pre-filled defaults are a realistic starting point — replace them with figures from your own environment for a result you can act on.