A Step-by-Step Guide to Projecting Your Taxes for Next Year as an Independent Contractor
When you’re a law partner or independent contractor, estimating your tax bill might not be top of mind while you’re focused on getting work done. But whether you're a self-employed lawyer, a partner at a firm, or simply have income that fluctuates throughout the year, it’s easy not to know where you stand with taxes — until it’s too late to make adjustments.
A simple tax projection before year-end can help you be proactive and save yourself from a big bill or missed opportunity. Let’s walk through how to do it.
What’s a Tax Projection and Why Bother?
A tax projection is just what it sounds like: a rough estimate of what your tax liability will be for the year, based on your income, deductions, and payments so far.
It’s not the same as filing your taxes, but it’s a way to get a preview so you can course-correct before the year is over.
If you’re a law partner or solo practitioner, a projection can help you:
Estimate whether you’re on track with quarterly payments
Identify opportunities for last-minute deductions (like charitable giving or retirement contributions)
Avoid penalties for underpayment
Plan ahead for cash flow, especially if April is already shaping up to be a high-expense month
How to Run a Basic Tax Projection
You don’t need to be a CPA to get a ballpark estimate, but you do need to gather a few key details:
Income so far this year. This could include W-2 income, 1099s, law firm distributions, rental or investment income, etc.
Projected income for the rest of the year. If you expect a bonus, Q4 distributions, or plan to invoice for outstanding client work, include those estimates too.
Deductible expenses and contributions. Such as SEP IRA or solo 401(k) contributions, business expenses, HSA contributions, etc.
What you’ve paid in taxes so far. Include federal and state withholdings, plus any estimated quarterly tax payments.
From there, you (or your financial planner or tax professional) can plug the numbers into a tax planning tool or even a spreadsheet to get a rough estimate of your total tax bill and what might still be owed.
Why You Should Do This Before December 31 (But Ideally Before December 15)
Here’s the catch: most proactive tax moves have to be made before December 31. But realistically, many financial institutions (and people!) start to slow down for the holidays around mid-December.
That’s why we tell clients to treat December 15 like a soft deadline for things like:
Making charitable contributions
Executing a backdoor Roth
Deferring income or accelerating deductions
Making an extra estimated payment to avoid penalties
Your tax professional will thank you. And so will your post-holiday coma January self.
When to Bring in a Professional
If you’re making six or seven figures and have multiple income streams, a tax projection isn’t just helpful, it’s imperative. Especially if you:
Just started a firm or moved to a different compensation structure
Had a particularly strong year
Plan to make a large charitable gift or contribution to a donor-advised fund
Are juggling multiple entity types (LLC, S-corp, etc.)
A financial planner can help you run projections, identify smart strategies, and work alongside your tax professional to execute before year-end.
Planning Doesn’t Have to Be Perfect, Just Proactive
You don’t need to know every number down to the cent. But the goal here is clarity and control. A one-hour review this fall can give you peace of mind, prevent unnecessary penalties, and even uncover new ways to save.
Want help running a tax projection or exploring end-of-year opportunities? Let’s set up a time to get you set up for success.
