I never know how much to set aside for taxes
As a sole proprietor running a one or two truck operation, nothing is withheld when a customer pays your invoice, which means the full income tax and 15.3 percent self-employment tax burden falls on quarterly estimated payments you have to calculate and remit yourself. Most owners guess at a flat percentage, and that guess rarely matches a year with a slow winter and a busy summer.
Income that swings with the season, jobs paid partly in materials reimbursement, and a mix of cash and card payments all make this harder, since a flat rule of thumb doesn't account for deductible truck and tool expenses that reduce what's actually taxable.
Underpaying quarterly estimates triggers an IRS underpayment penalty calculated separately for each quarter, and an owner who discovers a large balance due in April, with no cash set aside, often has to borrow against a line of credit or delay a truck payment to cover it.