So, this is the second year in a row I've made a mistake with regard to my home business taxes. Last year, I was silly enough to think that my husband's student loan surplus would cover taxes and didn't set anything aside. This year, I set up an LLC. And in the meantime, set aside money in a special high-yield savings account for the purpose of saving up for taxes.
We-ell, we needed to make a down payment on a new home and, well, there goes part of what I'd stored away.
Luckily, both times I just had to do a little extra to make up the difference. This year I know even better. You can go to the IRS Web site and print out payment coupons and pay your taxes quarterly. This year will be based on last year's taxes, so since I plan on earning more, it won't cover it all. But I'll have to make up a lot less. Plus, it will keep me honest, since I won't be tempted to spend tax money on other things...