If you haven’t already done this form, it might be worth investigating.

It’s worth looking into creating a business entity that pays you a W-2 salary. I pay myself a salary sporadically during the year and then as the year-end approaches, I use my last (and usually largest) check of the year to “withhold” extra as needed to make up for any tax withholding shortfall during the earlier part of the year. So my last paycheck may, and sometimes has, gone almost entirely to taxes, but I don’t have to mess with the quarterly calculations of estimated tax or penalties for underestimating.

Obviously, this is not a strategy for someone who can’t save adequately during the year. It just means a once-a-year hassle instead of a quarterly one, and no penalties for underestimated taxes.

There are other benefits and disadvantages to various structures, so it needs to be looked at from a lot of angles, but this ability to tack extra withholding onto a paycheck and skip the estimating stuff has been nice.

p.s. here in the U.S., even promotional rates
are miniscule :(

EXCEPT.

In order to make those payments, you really have to set the money aside as you go. If he’d put 30% of each week’s deposits into his tax account like I suggested, he would always have plenty available.

Because there *is* a penalty for underpayment, but if you’re paying as much as you owe, even if that’s less than you estimated, there’s no underpayment, thus no penalty. 30% will cover most situations.

Also, I agree with the poster who doesn’t understand how GenCon is a mistake.

I’m in Canada, and cannot find any bank offering anything even remotely close to 3.5% for regular checking accounts. ING up here only offers 1.20%. The credit union I used to use for my “high interest” savings is currently paying only 1.85% for their “Daily Interest Savings” account.

My point is that rates vary widely by geographic location. Trent is in the US, where rates are currently very low. Thus, Trent’s assertion that it is hard to find a higher rate while keeping his savings liquid and free of risk is accurate, given his location.

I reiterate that index funds, Internet lending communities, and gold bullion do not provide the low risk and high liquidity necessitated by Trent’s short term savings funds.

I am getting 3.5% from ING Direct. This is a promotional rate in the UK, so may not be available in the US. I can trivially achieve 3.5% from a number of other places, though.

In 4 years of using Zopa I haven’t had a single defaulter; a couple of late payments is all. Please don’t confuse Zopa, which has better-than-industry-standard credit checks, with cowboys like prosper.com. And, now that I check, you’re right – I’m not getting 9.5%. I’m getting 10.2%, *average*, over the last year.

Gold may or may not go higher. I don’t have much money in gold, a couple of thousand at most. I don’t much care whether it goes up or down, since it’s simply part of a diverse portfolio. I merely mentioned it as an option, I didn’t and wouldn’t suggest anyone should put all their money there.

Trent needs his excess cash savings to be liquid and safe, which rules out Index funds.

Where are you finding 3.5% interest in a “normal savings account?” The best I can find is 1.5%. Please be specific.

Zopa is a peer-to-peer lending site, which again sacrifices safety and liquidity. Those sites have notoriously high default rates, and I’m highly skeptical of your claimed 9.5% return.

Bullionvault may have risen 10% recently, but given that gold is already at record highs, is it likely to continue climbing? Again, this is much too risky for cash that needs to remain liquid and safe.

It’s not exactly hard to find decent returns these days. My index funds have all recovered (money invested in 2006/7 is back to where it was, and money invested after 2007 is up *massively*). I’m receiving 3.5% in a normal savings account, around 9.5% at zopa, and my bullionvault account is up around 10% too. Why are you having so much difficulty?

Which it seems that you do.