How is my tax estimate calculated?

If you’re a sole proprietor or operate a single-member LLC, Found can automatically estimate your quarterly taxes. Found’s tax estimate considers a few different factors when calculating how much you might owe:

• Your Tax Profile. When you sign up for Found, you answer a few questions about how much income you receive, any adjustments or credits you qualify for, and other information that helps Found determine your tax bracket. You can make changes to this profile at any time.

• Your real income and transactions. As you use your Found account to receive business income and make payments, we’ll factor those transactions into your estimate. Be sure to categorize your business spending as deductions!

• Your bookkeeping activity. If you add records for income or transactions made outside of Found, we’ll make that your estimate counts those as well. If you’re new to Found, consider setting up connected accounts or importing a CSV to bring over your business’s transactions.

• Mileage and home office deductions. When you use your vehicle for work-related trips, you can track those trips in Found. And don’t forget to write off your home office usage, if you have one.

Based on these factors, Found calculates an estimate of how much you may owe in federal income tax and self-employment taxes. If you live in a state or municipality that levies its own income tax, you can enter a flat percentage to account for these taxes in your Taxes settings.

Every time you get paid or record an expense, your tax estimate will update—including if you backdate expenses from earlier in the year. Added $100 in expenses? You’ll see your tax estimate go down, because your taxable income just decreased.

Note that tax estimates are currently only applicable to sole proprietors. If you’ve selected S Corporation or Other as your tax classification, Found will not show an estimate. But, you can still automatically save for taxes with the Taxes pocket.