I want to designate 25% of my income from work for taxes. How?

I have a fluctuating income and work on a 10-99 contract. Taxes are not taken out of my pay, so I have to set aside some amount (like 25%) for taxes.

I get paid on PayPal ($1,600 for example), I transfer the money from PayPal to my first checking account, then I transfer 75% of the pay to my second checking account.

For this example, now there's $400 in my first checking account, and $1,200 in my second checking account. The $400 is to be saved for taxes. The $1,200 is good to spend.

I would like to designate the $400 in my first checking account as specifically allocated for taxes. Is there any way to do that in Quicken? It would be really nice to be able to see in a pie chart that I earned $1,600 and $400 was set aside for taxes, but as far as I can tell there's no way to do that in Quicken.

I thought about hiding my first checking account from my Banking section so that the money in my first checking account doesn't get calculated into my net worth, but the transactions are still categorized as income there. So if I hide the first checking account, then Quicken doesn't recognize that I have any income from work, which is a problem.

Is making a budget or savings goal for this the best way to allocate specific funds for taxes?

Apologies if this is the wrong category to ask this question.

Answers

  • Jon
    Jon SuperUser, Mac Beta Beta
    edited April 20
    I've never dealt with this exact problem wrt taxes, but in a more general sense I do want to set aside money for specific purposes; there isn't a great way to do that in Quicken Mac. In the past what I did was open a savings account & put the money there, and in Quicken I would give the account a name indicating its purpose. In your situation I would have called it something like "Quarterly Tax Escrow".

    If you set up a budget in Quicken you can include transfers to or from specific accounts in your budget, so you could possibly do something with that to categorize the money you're setting aside for taxes.

    These days I just track things like that in a spreadsheet outside Quicken instead.
    Quicken Mac subscription. Quicken user since 1990.
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