How do I allocate money for income taxes?
Sole proprietorship here (for now, at least). I got paid, which is great! But my governments also need to get paid, at some time in the future. I know how much of my income they'll want, so I want to transfer that percentage of my income into Taxes Payable. That way I'll know how much I can draw for personal use, after expenses and taxes payable. But I can't figure out how to do it.
For clarity, here's a (hopefully fun) example:
Let's say I get paid $100. Yay!
It cost me $10 to make that $100, so my profit is $90. But I can't just take that and go to the store. I have to save some for when it's time to file taxes.
Say the government needs 10%. Okay, now I want to allocate $10 in Taxes Payable, too. That leaves me $80 to take to the store. Now I know how much I can spend.
How should I keep track of all this? I already have a paid invoice in Zoho Books. None of my bank accounts are linked to Zoho Books and I'd prefer to keep it that way.