Dwayne is self-employed. Based on last year, his projected state and federal taxes for this year will be approximately $10,800. Determine how much Dwayne should put aside each month in order to have enough to pay his estimated quarterly taxes.
To determine how much Dwayne should put aside each month to pay his estimated quarterly taxes, we first need to calculate the total amount he needs to set aside for the year.
If Dwayne's total projected state and federal taxes for the year are $10,800, then he will need to pay $2,700 each quarter ($10,800 divided by 4 quarters).
To make it easier to save for quarterly taxes, Dwayne should set aside this amount each month. Therefore, Dwayne should put aside $675 each month ($2,700 divided by 4 months).
By putting aside $675 each month, Dwayne will have enough saved up to pay his estimated quarterly taxes of $2,700.