Before I ever worried about branding, clients, or scaling, I made one decision that quietly protected my business.
Hi, I’m Kathleen,
and I’m here to share what 15 years working in entertainment and strategy, eight years of which have been self-employed, has taught me about business, work, and culture.
Today we’re here to talk about the one piece of advice that has saved me thousands of dollars and probably many panic attacks and was the best piece of advice I got when I started working for myself eight years ago.
It is unsexy, but it is the key to creating the foundation of a good business.
Drum roll, please.
Yes, we are here to talk about taxes.
The thing that nobody wants to talk about, but this time of year is incredibly important.
When I first started working for myself — or was thinking about it — I met with several people that had been doing it longer than me.
One person gave me this piece of advice that I try to pass on to everybody as often as I can:
Always pay your estimated taxes.
At that point, I didn’t even know what estimated taxes were.
I was used to being a W-2 full-time employee where all of my taxes were handled by my company and HR.
And suddenly I was staring down the barrel of working for myself and having to handle every single aspect of running a business on my own.
It was overwhelming.
It was intimidating.
He told me that if you work for yourself, you have to pay estimated taxes to the government four times a year.
And if you don’t, there is a penalty — which I had no idea even was a thing.
Obviously, I knew that I would have to pay taxes at some point and in some way. But from the very beginning of working for myself, I did the thing that I’m about to share with you.
And it has saved not only thousands and thousands of dollars over the years, but so many panics, so many headaches, so many moments that I’ve seen other people walk through.
So let’s start with the basics.
There are tax deadlines four times a year.
If you work for yourself, you have to pay estimated taxes on these four deadlines:
April 15th
June 15th
September 15th
January 15th
Essentially, you pay estimated taxes for what you made in the quarter preceding the deadline.
So for April 15th, you’re paying estimated taxes on the money that you made from January through March.
There are many ways of calculating this. I would recommend talking to an accountant about it.
But you pay your estimated taxes to the government — and you do it four times a year.
The second point:
If you do not do this, there are penalties.
It’s structured as a percentage penalty for inadequate payment.
For every day that you have not paid the adequate amount, there is a penalty.
Nobody wants to pay penalties when you can just get ahead of it.
There is a huge temptation to say:
“Oh, I need the cash flow now and I will deal with taxes later in April when it’s the tax deadline.”
I understand that temptation.
But oftentimes what I see happen—with friends, with colleagues, with people who ask me about this—is that they spend the money and do not save it.
Then April 15th comes along and they have not accounted for taxes.
And suddenly they’re stuck owing thousands of dollars in taxes plus penalties that they have not planned for.
And it sends people into an understandable panic.
So here’s my advice:
If you build this habit as soon as possible, it becomes so easy to maintain.
What I did when I first started working for myself, before I had incorporated my business and had separate checking and savings accounts, is I opened a separate savings account in my bank.
I put 30% of everything that I made straight into that savings account.
And I pretended like it didn’t exist.
I didn’t spend it.
When the tax deadlines came up for that quarter, I would work with my accountant to figure out what I needed to pay.
I would pay my tax estimates, and I would keep the rest of that 30% sitting in the savings account.
At the end of the year, if there was any leftover, I used that to fund retirement accounts—because you’re also still on the hook to figure those out for yourself as well.
It made such a big difference to just put a set percentage away directly into that savings account and pretend that it didn’t exist.
I never spent it.
And in all eight years that I’ve worked for myself, I have never owed taxes.
I’ve actually gotten refunds most years—small refunds, but still a refund—because I paid my taxes throughout the year.
I have never come into tax season in April with a huge surprise tax bill that I did not know how to pay.
And it has probably saved my business.
It has definitely saved me thousands of dollars, and many hours of therapy and panic and anxiety.
So if I’m going to give anybody a piece of advice when they’re first starting, it is this:
Please, please, please pay your estimated taxes every single time.
Do not wait.
Do not say you’re going to figure it out later.
It will be the one thing that can really set your business apart from a sustainability perspective and allow you to keep working for yourself in the long term.
So please save this.
Share it with a friend who you know is thinking about going freelance or is in the middle of it.
You can always start paying your estimated taxes and start saving for it.
It’s tax season, so pass this advice along.
It is the unsexy parts of working for yourself that make the biggest difference.
That’s what I want to share it with more people. Because it’s something that helped me tremendously, and I want to make sure that as many people as possible can get that same help.
I appreciate that someone gave it to me.
So I want to pay it forward.
Exit Interview is the honest debrief on work, power, and culture. I'm Kathleen—I've spent 15 years working in entertainment, advocacy, and strategy, and the past eight building a business on my own terms. This is where I say the quiet part out loud: how power actually moves, how careers really evolve, and what I've learned since stepping off the corporate ladder.
