Rich folks know how to work the system. I ain't rich, but I took a card from their play book - I do NOT do my taxes myself, and I do
NOT use off the shelf services like H&R Block.
It's gear to my studio or money to the Fed Gov. My choice. Most years I chose new gear for the studio.
With my first accountant, it took several years for him to figure out and zone in on what I did, how I did it and how to best optimize my tax strategy, When he finally figured out how I worked and how people paid me, he said to me that my income was "rental" income which was not subject to SS taxes. To play safe, he ended up with the 3:1 ratio above. Creative accountants are worth their weight in gold (LITERALLY!!!). When asked several times, he advised me AGAINST forming a corp.
A normal conversation with him at tax time would go something like this :
Him : "I've got your information input. Because you didn't pay in any estimated taxes this year, looks like you may owe $12-15k to the feds."
Me : "Crap! Can you do something?"
Him : "Yeah, let me work on massaging your numbers a bit. I'll get back to you"
Me : "Thanks Mike"
A couple weeks later.....
Him : "You can come in and pick up your taxes"
Me : "What's the bad news..."
Him : "No bad news. You're getting $100 back. I got your numbers down from $10-15k owed to 100 back"
Me : "But I didn't pay any estimated this year"
Him : "I know.
"
He was awesome. Knew where to push, and where to be careful. I miss him. Crusty old bloke, but he knew exactly what to do and what NOT to do.
Accountants are a lot like musicians. There are the ones that can only play the notes on the paper, and the ones who are creative and play "music" that is far and away beyond what the producer calls them for.