Dear Dangerously in Love with Your Finances,
Oops, I did it again!! I am a mental health provider – Licensed Marriage and Family Therapist – located in Austin, Texas. As a solo clinician not on the practice payroll, I keep getting into trouble with my taxes: I am not saving enough to pay my quarterly tax obligation. This year, I know it will be a sucker punch to my stomach when my tax accountant reveals how much I have to pay. Can you provide me with money management tips on preparing for quarterly tax payments?
~ LMFT in Quarterly Tax Payment Trouble
Hi LMFT in Quarterly Tax Payment Trouble,
Please know you are not alone in the quarterly tax payment “mental health professional” circle – the circle is pretty big. Most payers are under cover and don’t want to be identified or ask for help.
The good thing for you is that you are asking for help. Yes, there is help for you. However, it takes discipline to change your financial mindset when it comes to saving.
Paying quarterly taxes is all about saving money: putting a percentage of the money you earned aside so it is there when the quarterly payments are due. Having the money available and ready eliminates the sucker punch to the stomach.
I recommended this process for you which I call my financial accountability plan:
- Open a separate bank account earmarked for tax saving
- Each and every time you received payment from a session, subtract 25%
- Put that 25% into the tax-saving bank account
- Perform this process weekly; after a week, it should become a routine
I can hear you saying 25% is a high percentage. I agree! The downfall of being “a solo clinician, not on payroll” is that you pay both the employer and employee tax portion.
Implementing this accountability process will lessen the financial burden of writing a check for your quarterly estimated payments.
Treating this tax payment like one of your monthly expenses will help you reserve the funds needed for it. For advice on how to manage your recurring expenses, read my blog: 4 Easy Steps to Manage Your Recurring Expenses Like A Pro.
If you need help with another money management process for your mental health practice, please do not hesitate to reach out.
As always, stay dangerously in love with your finances,