I’m self employed and need to withhold taxes for quarterly payments. My workflow looks like this:
What’s a good way to approach tracking this with Tiller?
It’s all just transfers between accounts until the money actually leaves for the estimated payments to the government. Then it should be classified to a category such as “Federal Estimated Payments” or “State Estimated Payments”. I suggest making sure you keep them in a savings account separate from any other funds.
Agreed, assuming all of your various accounts are linked to your spreadsheet, using the transfer category as funds are moved from one account to the next would be the best option. Once the payment is made… as @Kathryn stated, you can use a category such as “Federal Estimated Payments”
Thanks. Not totally sure I’m clear on the solution. I get they’re transfers. But I want to understand:
Are either of you actually solving this problem? If so, what categories and category types do you use in your workflow?
Thx!
@rmr,
What do you mean by “manually-tracked withholding savings account” - does that mean it’s an account that Tiller can’t automate, but it is an actual savings account you have at a bank, or it’s a “virtual” savings account that you’re tracking manually within Tiller to try and keep this organized?
Are you also recording the transactions for this “manually tracked withholding savings account” in your Transactions sheet or just manually updating the balance?
I’m asking because that will affect your category workflows and how you should set things up to be able to see how much you’ve saved toward taxes and how much you’ve actually paid toward taxes.
Most of the year you likely want to budget for the savings.
If you’re recording both sides of the tax savings transactions this would net to $0, but if you want to see the savings item in your budget (to budget for savings) then you may also want a hidden income category (categories sheet hide from reports column) for the inflow to the savings account.
As long as you always save the amount you budgeted to save on the Yearly Budget sheet in the Foundation template you’ll be able to see how much you’ve saved for taxes.
When it comes time to make the payment you categorize the transfer back to your checking account as a transfer (both sides so you’d need both transactions in the Transactions sheet) and then when the check/withdrawal goes through categorize that as “taxes paid”
That would be my recommendation. As you can see it’s a little complex with so many moving parts.
If you have a simple business and tax situation, you might consider using the Estimate Quarterly Tax sheet to help you keep organized, but there are some caveats so be sure to read about the assumptions and expectations carefully.
Heather
Correct, it’s an account Tiller can’t automate.
Are you also recording the transactions for this “manually tracked withholding savings account” in your Transactions sheet or just manually updating the balance?
When money leaves my checking account (pulled automatically) I categorize it as “Tax Withholding” which is a Transfer category. The receiving account is manually tracked and I just update the balance for this account once a month.
Most of the year you likely want to budget for the savings.
I don’t actually. My income is spiky as I’m self-employed. Budgeting doesn’t make a lot of sense.
Right now the workflow is:
It seems to be working OK so far. But curious how others handle this.
Blake
@Blake Yes, #3 is coded as a Transfer. Edited the above post to include that. Thanks!
I am having the same issue. I am a 1099 Sales rep. To be safe, I calculate around 23% to be withheld for taxes each check. One check may be $X amount and another would be $X amount. Could be less, more, really low, really high, or the same. It fluctuates a ton, and until I have more data throughout the months, I can’t pin a reliable average to budget for. Anyways, I have 3 connected accounts. Checking and Credit Card with one bank and Savings with an online High APY account. For taxes, I have two categories.
Taxes Paid - Expense - Don’t know how to really budget this as I will make a one time payment come Uncle Sam’s birthday during Tax season.
Tax Withheld - Transfer - Which is automatically hidden by default. I would like to track the amounts that are being transferred from checking account to savings account. I don’t have multiple savings accounts so all my different savings goals are all combined into one account. I need to track the specific amounts so I know what portion of the total in my saving account X are related to different financial goals A,B, C. etcc… this is what I am doing, and it’s. similar to yours @rmr
Check is direct deposit into my checking account.
I take 23% of it and transfer to my high APY savings account to sit throughout the year and collect interest. - I categorize this as Tax withholding Transfer because the money is still mine and has not been spent, however I think of it as already gone and cannot touch so that is that lol.
I do this every check throughout the year.
Come tax time, I make a transfer from my savings account to my checking account - still considered Tax withholding as a transfer.
I pay Uncle Sam and because this amount has actually been spent, its now a TAX PAID - Expense.
The remaining dollars, lets say I saved more than the amount of TAX i needed to pay, I just put that towards one of my other financials goals or save it for next TAX year to get a head start as a cushion. If I need to pay more than saved, I reduce spending elsewhere to offset this
However, I am still learning to track all my financial goals within one savings account. If others have advice on how to do this within Tiller, that would be awesome.
Any suggestions here @jpfieber @Mark.S ? Sorry to put you on the spot but thought your brilliance could help here 
I haven’t had to do this for myself, but as the others have suggested, moving money around should generate transfer categories. To track the money, I wonder if using a tag, or one of the envelope solutions might make sense. Also, maybe a 🏆 Budget Status - Google Sheets pool could be used.
@3legendre let us know if any of those suggestions are helpful. Thanks again @jpfieber !
