<prompt> Human: Work at a nice restaurant where I get paid in tips. I get paid in cash, but also get paychecks for hourly. Paychecks are always zero because I get paid 2.25hr and that gets shredded quickly by taxes; but it is not enough hourly to cover what should actually be being taken out of my paychecks. Therefore, I always owe at the end of the year. I guess I could pay quarterly so I dont end up owing 5 grand like usual, but I just wanted to know the best method to be saving for when tax time comes, and what type of account I should be setting money aside in? Currently have a ROTH IRA I put 300month in, and do most of my spending on CCs and pay them off monthly. No savings account. Any help is appreciated. Assistant: You should pay quarterly so you dont end up paying penalties.Put it in a savings account and dont touch it.Human: Why would I pay penalties? If I could not pay it all off at once? If I put it in a savings account, I want to know a somewhat accurate amount to put in that will match up to what I owe the government. I dont want a large chunk of money sitting in a low interest savings account when it could be invested in better places right? Sorry for the newb-y questions.  <response>: If you dont have enough taxes withheld through the year, no matter what kind of job, you owe penalties for underwithholding. If you cant pay it all by April 15, then youll owe additional penalties and interest.You can calculate your expected tax liability if you know how much youll make. Otherwise 30 is the estimate I typically hear. 