individual tax situations, the average employee has about 15% of their total wages or salary withheld from every paycheck for federal withholding. This is money that belongs to the employee that you must mail to the IRS.     If you will pay a total withholding of less than $500 every month, you may choose to pay taxes quarterly rather than monthly. Make sure you verify your employees actual withholding rates before deciding on this option.     Example: Lets say that you plan to hire one full-time sales clerk in your business for a total salary of $1,500 per month. Multiplying 29% by the salary (0.29 X $1,500 = $435) gives an answer of $435, which is less than $500. In that case, you qualify and may choose the quarterly option.     WarningPlease note that paying these taxes every three months instead of every month is a dangerous option because it means that you will be using your employees money in your business. By far the simplest, safest and best way to pay the government is to pay the total withholding amount every month.     7.Withholding Tax Payments. Skip this item if youll be paying your employees taxes monthly instead of quarterly. Otherwise, add together three months worth of withholding from line 6 and enter the total amount every third month on line 7. That is the amount you must write every three months to the IRS. If this little exercise seems confusing to you, take your confusion as a sign that you should not attempt this option. Youll be much better off simply paying the withholding taxes every month.     8.Depreciation. As discussed previously, depreciation is a fictitious expense you charge the business for using up fixed assets. Look at your Profit and Loss Forecast, which you prepared in If you included an amount for depreciation in line 4h of your Profit and Loss Forecast and reduced your profits accordingly, you must enter the same numbers here to get your monthly cash flow.     If you wrote nothing in line 4h of your Profit and Loss Forecast, you can leave this line blank and skip to line 9.     9.Principal Payments. In your Profit and Loss Forecast you calculated how much interest youd pay every month. Youll also make regular payments on the principal of your loan, which are shown in your Cash Flow Forecast. To get the amount of the principal payment, just subtract the interest payment, taken from line 4g of your Profit and Loss Forecast, from the total loan payment. (Review the chart in, if you have trouble.)     If you have a loan with interest-only payments and a large principal payment every few months or at the end of the loan, its essential that you write in the scheduled principal payments. That way, youll be able to plan for them and avoid the nasty surprise of having to make a large loan payment you forgot about.     WarningBe sure that the interest expense from the Profit and Loss Forecast D, line 4g) monthly payment.     10.Extra Purchases. Lets say that you plan to have a big sale sometime during the year and need to buy extra merchandise for the sale. These extra purchases are above and beyond normal inventory replacement, so they wont be covered by the amounts you have written for purchases resulting from your cost of sales. Include those extra purchases here.     11.Other Cash Items. Here is where you place any cash receipt or expenditure that is not