Monthly Tax Reserve System

How It Works

1. Personalized Calculation: We determine your specific tax reserve percentage based on your federal and state tax brackets. This percentage is then multiplied by your year-to-date profit to calculate your required tax reserve amount.
2. Monthly Deposits: Each month, you'll deposit the recommended amount into a dedicated tax reserve account. We recommend using Relay Financial for this purpose.
3. Regular Reporting: You'll receive monthly statements showing your current tax reserve balance, representing the amount you should have set aside as of the report date.
4. Quarterly Payments: Before each quarterly tax deadline, we'll send you a notification through your client portal with the exact payment amount due. These payments are typically due on:
   • 1st Quarter: April 15
   • 2nd Quarter: June 15
   • 3rd Quarter: September 15
   • 4th Quarter: January 15 (of the following year)
5. Payment Tracking: When you make your quarterly tax payments, we'll log them in our system and reset your tax reserve balance to zero for the next quarter.

Bi-Annual Comprehensive Tax Planning

In addition to the monthly tax reserve system, we conduct comprehensive tax planning twice per year:

January Tax Planning

In January, we'll:

• Pull all financial data from the prior year to ensure all estimated tax payments made have covered your full tax liability
• Verify that all quarterly estimated payments were properly applied to your tax account
• Review your previous year's financial performance
• Analyze any tax law changes that may affect your business
• Assess your tax situation for the upcoming year
• Send you a detailed questionnaire about any anticipated changes in income, investments, or business activities
• Adjust your tax reserve percentage if necessary based on our findings
• Provide strategies to optimize your tax position for the new year

June Tax Planning