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Lane
Lane, JD, CFP, MBA, CRPS
Category: Finance
Satisfied Customers: 11844
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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I have a partnership and have grossed over six figures in

Customer Question

I have a partnership and have grossed over six figures in sales. I have started saving estimated taxes owed, as has my partner. I feel so unorganized and unofficial...constantly fearing that I am missing something. What is the best way for me to manage
my tax liability and be more aware of what I owe throughout the year?
Submitted: 1 year ago.
Category: Finance
Expert:  Lane replied 1 year ago.

Hi,

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The best way to so this is to dummy-up a 1065 (partnership tax return) using turbo-tax or one of the other packages.

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You'll have to project the full year. but as you get closer to the end of the year, less and less of your number will be projection.

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Doing what's called a cash budget (where you show a projected amount for each month and the put in the actual as you get the information is a best practice from a management standpoint anyway - and an show you where your expenses are going, hence, where your real profits are coming from.

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Doing this would then make re-projecting the tax return every so often much easier.

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But from a purely TAX perspective, simply modeling a tax return knowing what you know, and projecting as best you can for the remainder of the tax year - can give you a very good feel (and one that becomes more accurate as time goes on).

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Let me know if you have questions

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Lane

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