Setting up income tax related accounts

Employed people may not want to acknowledge it, but they are certainly having a cushy time- at tax time. For them, the employer deducts tax at the source every month and gives the IRS the form named W-2 at tax time. Once a year they file their tax return, attach this form W-2, and claim any refund or pay the small amount of tax that may be due, as the case may be.

As a small business owner, on the other hand, you have to worry about tax matters that weren't your problem when you worked for someone else. For starters, you are responsible for twice as much FICA taxes as you paid when you were employed. You need to make tax payments to the government quarterly. So you need to keep track throughout the year of how much you have earned and what you have paid to the government. In short, you need a good bookkeeping system, such as GnuCash.