Introduction
You might be making sales, but are you keeping profit? In 2025, high-revenue businesses are failing due to poor cash flow, unpaid taxes, and late payments to vendors.
Proven Tip:
Use a monthly cash flow forecast that includes tax projections, owner draws, and fixed costs to manage profit—not just revenue.
Proven Tip: Build a Monthly Cash Flow Forecast with Tax Planning Built-In
Most businesses operate without knowing:
- When their next IRS payment is due
- If they can afford a marketing campaign
- Whether they’re drawing too much or too little as the owner
By forecasting income and expenses monthly—while layering in estimated taxes, debt repayments, and growth plans—you gain financial control. Tools like LivePlan, Float, or Excel work great, especially when paired with your CPA.
IRC Tax Code Relevance
Improper cash planning can trigger underpayment penalties, especially under:
- IRC §6654 – Penalties for failing to pay estimated tax
- IRC §162 – Allows deduction for ordinary and necessary expenses (must be timely paid)
- IRC §446 – Accounting method rules affect when income and expenses are recorded
- IRC §1402 – Self-employment tax on net income (if owner isn’t incorporated)
Relevant IRS Forms
| Form | Purpose |
|---|---|
| Form 1040-ES | Pay quarterly estimated taxes |
| Form 1065 or 1120-S | Track profit allocations or owner compensation |
| Form 941 | File payroll taxes quarterly if you run payroll |
| Form 1120 | C Corporation returns (if you’re not a pass-through entity) |
| Form 4562 | Depreciate large purchases to reduce annual tax burden |
Example: $45,000 Saved with a Forecast-Driven Tax Plan
A Florida-based digital marketing agency grew fast in 2024 but forgot to set aside taxes. Their CPA caught it mid-year and built a monthly cash flow and tax forecast for 2025.
They added:
- 25% tax holdback on all income
- Monthly owner’s draw cap
- Budget for tools, contractors, and software
In Q1 2025, they avoided a $45,000 surprise tax bill, funded a new hire, and hit a 22% net profit margin—because they planned ahead.
Step-by-Step Guide to Financial Planning for 2025
Step 1: Set Up Your Forecast Tool
Use Excel, LivePlan, or your accounting software’s forecast feature.
Step 2: List All Recurring Revenue and Expected Project Income
Break it down by product, service, or platform.
Step 3: Categorize Fixed and Variable Costs
Include rent, payroll, subscriptions, and ad spend.
Step 4: Add Tax Holdbacks
Use 25–30% of net income as a placeholder for quarterly taxes and year-end liability.
Step 5: Update It Monthly
Adjust for seasonality, growth, or unexpected expenses.
Conclusion
In 2025, growth without forecasting is like driving blindfolded. Build a monthly cash flow forecast now—and include your tax obligations—so you don’t end the year broke or behind. Smart financial planning is what separates stable companies from the ones that stall.
Call to Action
Want help building a cash flow plan that includes tax payments, draws, and debt strategy?
Email Anshul Goyal, CPA EA FCA at anshul@kkca.io to schedule a financial roadmap consultation.
Disclaimer
This blog is for educational purposes only and does not substitute for financial, tax, or legal advice. Always consult a licensed professional before making financial decisions.
FAQs
1. How much should I save for taxes in 2025?
Generally, set aside 25–30% of your net income, but consult your CPA for accurate rates.
2. What tools help with cash flow forecasting?
Excel, LivePlan, Float, and even QuickBooks have forecasting features.
3. Is my owner’s draw taxed?
Yes, in pass-through entities your draw is not deductible—it comes from profits and may trigger self-employment tax.
4. Do I need to file Form 1040-ES if I pay myself through payroll?
Not usually, but if you have other untaxed income (freelance, investment), you might still owe estimated taxes.
5. Can I deduct future expenses in my forecast?
You can plan for them, but for tax deduction, expenses must be incurred and paid depending on your accounting method.
About Our CPA
Anshul Goyal, CPA EA FCA is a U.S.-licensed Certified Public Accountant and IRS Enrolled Agent. He helps startups, eCommerce sellers, and professional service firms across the U.S. build tax-smart financial systems, create growth-ready forecasts, and legally reduce tax bills.
To get your cash flow aligned with your taxes and business goals, email anshul@kkca.io.