How much should I set aside for taxes from each sale?

A safe first move is to treat part of every payment as tax money, not spending money. Your exact amount depends on your profit, business type, state, other income, and whether you pay self-employment tax. As a rough planning range, many new self-employed owners set aside typically around 25% to 30% of profit until a tax professional or tax software gives them a better number. If you sell products, do not mix sales tax you collect with your own income. That money may need to be sent to the state.

Steps

1. Separate revenue from profit. Taxes are usually based on profit, not every dollar that comes in. Profit means income minus ordinary and necessary business expenses.

2. Create a tax holding place. Use a separate savings account or a clearly labeled bucket inside your bank account. Move tax money there as soon as you get paid.

3. Start with a conservative reserve. If you do not know your number yet, choose a percentage you can keep consistent. Increase it if you also have state income tax, city tax, strong profit margins, or no withholding from another job.

4. Track deductions as you go. Save receipts and note what each expense was for. Common deductible categories can include supplies, software, advertising, professional services, mileage, and home office costs if they qualify.

5. Check whether quarterly estimated taxes apply. If you expect to owe tax and little or no tax is being withheld elsewhere, you may need to make estimated payments during the year. These are typically paid four times a year.

6. Review after your first profitable month. Compare income, expenses, and tax reserve. Adjust your set-aside amount before the balance grows too large.

If you are still stuck, open your Stratify roadmap and check the tax and bookkeeping steps for your business type. You can also ask the AI coach to help you estimate what to set aside based on your state, business model, and whether you have other income.