I’ve been very careful about taxes my entire freelance career. With every check I receive, I set aside a percentage for taxes and business expense before I pay myself. I pay my quarterly estimated payments. And most years I’ve received a small refund or owed just a little.
This year, I filed taxes late (with an extension). I also had a good year and as a family, we earned a lot (for us). I didn’t adjust my quarterly payments as I should have. The higher income meant we have to pay back our health insurance credit. Wham! Huge tax bill.
Luckily I have the money to pay it, although things will be a bit tight for a while.
Lesson learned? Keep up on my bookkeeping and check in with my accountant throughout the year to avoid another big, expensive surprise next year.
Have you ever had a big tax surprise?