I keep my tax money in a high-yield savings account to earn more - Business Insider

. In order to receive that rate, you need to have either a $25,000 balance or make monthly deposits of at least $100 . In addition, CIT is FDIC-insured, which means I know that my money is guaranteed up to $250,000.As an entrepreneur, I am responsible for withholding my own taxes

Using a high-yield savings account works out great for me as an entrepreneur because, unlike W2 employees, I am responsible for paying my own taxes manually. Because of my income threshold, I pay forecasted taxes quarterly throughout the year. applies to all individuals who gross $400 or more from earnings outside a W2 employer. The 2020 self-employed tax rate is 15.3% on the first $137,700 worth of net income followed by an additional 2.9% on earnings greater than that.

To make sure I'm on track to pay my quarterly taxes, I simply put aside 30-40% of my pay into my tax-designated savings account. That way, I have enough money to pay my quarterly estimated taxes — and my money is earning interest throughout the year. Staying ahead of the game by automating a portion of my earnings to a high-yield savings account means I don't have to worry about quarterly or annual taxes sneaking up on me — why not make some interest off it at the same time?

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