Do you have a budget? If you do, great job! Budgets are awesome for keeping track of where your money is going and stretching your dollar. But there’s a piece of budgeting that even the most vigilant budgeters miss: taxes. Do you know how much money to set aside each month for taxes? Most Americans don’t. This can be a critical mistake, especially if you’re strapped for cash.
If you’re one of the millions of freelancers who isn’t experienced with freelancer finances, then budgeting for taxes can seem impossible. However, there are steps you can take to make budgeting for taxes simple and easy. Using a tool like Lilac is a great first step in taking control of your taxes. Lilac shows you exactly how much you can expect to owe in real time. That means you’re never left wondering what your tax situation looks like. If you aren’t putting money aside to pay taxes and aren't sure how much you owe you could be in a serious pinch come tax time. Knowledge is power when it comes to your finances, and using yourself with a tool like Lilac ensures you have everything you need to start managing your taxes like a pro.
If you already budget for taxes, you could still be making mistakes that could cost you. Over-budgeting, or setting too much money aside, for taxes means that leftover money is just sitting around all year. That’s money that could be paying off student loans, collecting interest, or growing your business. It’s important to know exactly how much you’re going to owe so you can maximize how far your dollar goes. A tool like Lilac can help you stay on top of your taxes and tell you how much tax you’re accumulating throughout the year.