“Whew! That wasn’t as bad as I thought it would be!”
That’s what I’ve heard from four different business owners over the past couple of weeks—each one breathing a sigh of relief and celebrating that they didn’t owe as much as they feared they would.
Which is great! But… they still owed a chunk of change.
And I have to imagine they’ve been living with some level of anxiety leading up to tax time—expecting to get hit with an even bigger bill, but not knowing for sure how everything would play out.
Of course, everyone’s financial situation is different. There may be perfectly valid reasons why my friends managed their taxes the way they did. But I also know a lot of solopreneurs find themselves in a stressful scenario—not because they planned for it, but because they didn’t.
Why live like that?
What if, instead of hoping for the best, you could have total clarity about what you’ll owe—and know for sure that you already have the money set aside (or better yet, you’ve already paid your dues)?
Now, I’m not a tax professional (anyone who’s been following my recent tax drama already knows this!), and this isn’t meant to be tax advice. Every business situation is different, and it’s always best to talk to a tax pro to make sure you’re following the best approach for you.
But I want to share 3 tools that can help you level up your business finances and navigate tax season without stress, surprises, or regret.
1. A Book
Most small business owners make money, pay their expenses, and then figure out how much is left over for profit and taxes. That’s a recipe for financial stress.
Profit First by Mike Michalowicz flips that equation upside down.
In a nutshell, Profit First is a simple cash management system that helps you set aside money for taxes and make sure you are paying yourself before you spend a dime on operating expenses.
Here’s a super simple way to apply it right now:
- Open a separate bank account specifically for taxes. (The full method recommends setting up five different accounts, but let’s start with this for now.)
- Every time you get paid, set aside 15-30% of your income into your Tax Account. (The exact percentage depends on your tax bracket and your business expenses—another good question for a tax pro!)
- Forget this money exists until it’s time to make your tax payments.
By doing this, you’re not scrambling to come up with the money when tax time rolls around—you already have it waiting.
If you haven’t read Profit First, I highly recommend it (grab a copy here). But even if you don’t get through the whole book, this one simple shift can be a game-changer.
2. A Bank
Setting aside tax money sounds easy in theory, but you need to be disciplined enough to actually do it. That’s where Relay comes in.
Relay is an online business banking platform that automates the Profit First method for you—so you don’t even have to think about it.
Here’s why I love it:
✅ Automatic Allocations – You deposit all of your money into your “Income” account, and Relay automatically divvies it up into your different accounts on a set schedule (Taxes, Operating Expenses, Owner’s Pay, Profit, etc.). You make money, and Relay makes sure it gets to the right place.
✅ No Fees, No Hassle – Unlike some banks that require minimum balances to avoid fees (which doesn’t work if you’re regularly emptying your Income account into other buckets), Relay lets you create and manage multiple accounts with zero account fees.
✅ Total Financial Clarity – The user interface is way better than other banks I’ve used in the past. It’s easy to see at a glance exactly how much you’ve set aside in each account.
🚀 Want to see why it’s my go-to business banking platform? Check out this video where I break down all the benefits—plus, learn how to grab a tasty sign-up bonus for friends of Self-Employment Sidekick.
That said, whether or not you go with Relay, I highly recommend finding a bank that allows you to:
- Manage multiple accounts (without crazy minimum balance requirements)
- Easily transfer money between accounts
- Give you clarity on where your cash is actually going
These small changes can make a huge difference in your business finances.
3. A Back Office Team
The first two tools are great for anyone—especially early-stage solopreneurs and DIYers. But if you’re ready to take things to the next level, a service like Formations Corp can help you manage your business finances like a pro.
Here’s how they can help:
📌 S-Corp Setup – For some businesses, electing to be an S-Corp can save thousands in self-employment taxes (here’s a really quick look at how that works). Formations can help set it up properly and make sure you stay compliant with all the nitty-gritty regulations.
📌 Bookkeeping & Payroll Management – Keeping your books up to date throughout the year makes tax season effortless. No more last-minute number-crunching. Formations calculates your tax liability, runs payroll, and helps you stay on track with your tax payments.
📌 Tax Strategy & Preparation – They’ll prepare your annual business tax return and help ensure you’re taking advantage of every legal deduction you’re entitled to. (No sketchy TikTok tax hacks here!)
A professional service like Formations isn’t free, but in many cases, the tax savings alone more than cover the cost of the service.
Even more valuable than the tax savings? The time savings and peace of mind.
No more wasting hours trying to figure everything out on your own. No more anxiety about whether you’re doing it all wrong.
I recommend shopping around for different services and asking for recommendations for trusted local bookkeepers and tax specialists. If your business is growing, this is something worth investing in.
The Bottom Line: Stay Ahead of Taxes, Always
Taxes aren’t optional—but tax surprises are.
Deadlines for this tax season are right around the corner, but it’s never too late to start building a better financial system.
✅ Set up a Tax Account and start setting aside a percentage of your income today.
✅ Use a platform like Relay to automate the process so you never forget to save for taxes.
✅ Consider working with a service like Formations to optimize your tax strategy and bookkeeping.
No more celebrating that “it wasn’t as bad as it could have been.”
No more stress. No more surprises. Just financial clarity and confidence.
