Cesium estimates the tax on your income as you work, so you know what to set aside and what is safe to spend.
Taxes has three tabs: Calculated Taxes (the estimate), Estimated Taxes (the tax payments
you have made) and Other Income (money no Ataru invoice holds). On Calculated Taxes, choose the period the rows are grouped into -
Monthly, Semi-Monthly (1st-15th, 16th-End) or Weekly; the Default billing period in the tax configuration sets the one it opens on.
The Equation
Your Income
−
Estimated Tax
=
Safe to Spend
Your income is counted the way you choose below. By default tax is estimated on your gross income, so you always know what to set aside; if you prefer, switch a year's
estimate to operating income (gross minus expenses) in the tax configuration.
Safe to Spend shows on Calculated Taxes for the year and for every period: the income less the tax estimated
on it. Expenses are not taken off. It can go below zero when the tax is more than the income.
How Your Income Is Counted
You choose once how your income is taxed, and the estimate, every period row and Safe to Spend follow it in every year. The first time you open the Calculated Taxes tab it asks, with your country's usual method marked; change it later under Income Method in the tax configuration.
Money received
Income counts on the day the money arrives.
Usual for a freelancer in the United States, the United Kingdom, Australia and New Zealand.
Invoiced
Income counts on the invoice's date.
Usual in Canada and Ireland.
Earned
Income counts on the day the work was done, at your rates (items on the day you delivered them).
For anyone who does not invoice in Ataru, and the closer reading for an accrual filer who bills long after the work. Until you choose, the estimate counts earned work.
Above the estimate, one line shows the income it is worked out on - Received Income, Invoiced Income or Earned Income - with a note of what it includes.
Tax you collect is not income. Sales tax, VAT or GST on an invoice belongs to the tax office, so no method counts it: a payment counts
only its share of the invoice's own charges. On a $1,100 invoice with $100 of tax, a $550 payment counts $500.
Client credit. An overpayment held as credit is not income yet, because the client can still have it back. It counts when it pays
for an invoice or when you keep it.
Kept money. A tip or other extra you keep on a payment, and credit you keep, count on the day you kept them, under every method.
Write-offs. Under Invoiced and Earned, a write-off takes the part that was income back off, on the day you wrote it off. Under Money
received the money never arrived, so there is nothing to take off.
Not in this figure yet. Under Money received and Invoiced, a line under the income says what the figure does not hold yet: invoices
still unpaid (Money received), work you have not invoiced, and work settled outside Ataru. If that money was billed before you used Ataru or somewhere else, add it as other
income.
An estimate to help you set money aside, not tax advice or a filing. Each method follows the general rule for a solo freelancer in its countries; your accountant or tax
authority has the final word.
Configuration
Customize your tax profile for each year via the gear icon in the Taxes toolbar. This is a rough estimate to help you set money aside
- not a tax filing.
Income method
Money received, Invoiced or Earned (see above). One choice for the account; it applies to every year.
Tax components
Add as many named components as your country needs - e.g. Federal + State (US), or Income Tax + National Insurance (UK). Each is a single flat percentage, or progressive bands ("up to X -> Y%") for a banded income tax.
Apply tax to
Gross income (default) or operating income (gross minus expenses).
Load Defaults
Pick a jurisdiction (it starts on your Settings location) and press Load to fill in its usual components and rates, then edit freely. The US loads Federal and State; Canada loads Federal and Provincial.
A new year
A year you have not set up starts from the year before it - the same components, bands and base. With no earlier year, it starts from the usual components and rates for
the country in your Settings. It is saved the first time you change it; opening a form never creates it. Until then it is estimated with the setup of the year before
it, and says so, with Set Up for the year. A year with no earlier setup shows no estimate until you set it up.
Changes saved automatically. The tax year's start (month and day) is in Settings > Global Configuration > Fiscal Year.
Recording Payments
Record each tax payment you make, so Tax Over/Under on Profit-Loss is right.
1On Estimated Taxes, click Record Payment
2Enter the date, the authority and the amount
3Click Record Payment in the panel
Open a recorded payment to correct its amount, authority, date or notes (changes save as you go), or to delete it.
Other Income
The Other Income tab lists money you received outside Ataru invoices - before you started, billed elsewhere, or a one-off. Add
it with Add Other Income: the day it counts, the amount and a description (a client is optional). It is part of your income when
your tax estimate counts money received or invoiced; when it counts earned work, the tracked work that money paid for already counts, so the record is not added twice.
Open a record to edit it (changes save as you go) or delete it (Delete Income).
In Your Reports
Income and Profit and Loss open on the method your estimate uses, and you can switch either one to the other two to compare; the estimate itself always follows your income
method.