It’s a good question to ask in your financial reporting package. It’s one of the biggest things to understand. Where do you stand on income taxes? What are you likely to have to pay come the next quarterly payment?

So does your package tell you that?

It can be easy for it to be out of sight and out of mind. You might not have to make quite as much in deposits during the year, perhaps, based on prior year taxes. But here’s what I can see happen time and time again. You’re having a very good year. Income is up substantially versus the prior year. You’re making the minimum tax payment during the year because it’s capped based on what you had in the prior year. That is fine, but you’re building up a taxes payable number. Are you setting aside enough cash for that number? Too often, I see that’s not the case.

A good practice could be to tuck that money away and don’t think of it as your money. In reality, it’s going to Uncle Same. It’s just a matter of timing. You can still keep it invested, get a return on it in the short-term, but don’t keep it in the general checking account or you could end up spending it and then falling way short come tax time.

So keep your eye on the ball. Make sure that tax number is clear in your reporting package. Know what you expect to have coming up for the remaining quarterly payment during the year. Keep the money set aside so no matter what happens come the next quarter or two or three you’re covered for what happened so far during the year.