If you're self-employed, nobody withholds tax from your pay, so you send the IRS estimated payments four times a year. The due dates are April 15, June 15, September 15, and January 15 of the following year. Most people set aside a share of every payment they receive, often a quarter or more, and let it sit in a savings account until the due date.
With Dynamic Banking, that set-aside can go against your line of credit instead. Dynamic Banking means running your income through a line of credit, so each deposit lowers the balance, and the interest, until you need the money back. Plenty of people already run every dollar they earn this way. One viewer runs all of his income and expenses through a home equity line of credit, or HELOC, and wanted to add a cash value life insurance policy on top. That question became a video on running Dynamic Banking and infinite banking at the same time. Infinite banking means using a cash value policy as your own source of financing, and both rely on the same habit of running income through a line of credit. The tax money is a deposit like any other. It sits against the balance for weeks, and on the due date you draw it back out and pay the IRS.
Say you set aside $1,500 a week, so about $19,500 builds up over a 13-week stretch before it goes out. The IRS periods aren't actually equal, since the June payment covers two months and the January payment covers four. Still, on an average day roughly half of a payment, about $9,750, is sitting against the line of credit. At 8.5%, that's around $830 a year of interest you don't pay. A savings account would pay you something on that money too. But its rate is usually lower than a line of credit's, and the interest it pays is taxed.
The money doesn't show up as its own balance, so track it. Keep a running "tax owed" number in a notebook or a spreadsheet, and add to it every time you set money aside. Without that number, the available credit looks like spending money. For most sole proprietors, and for owners of businesses whose profit is taxed on their personal return, estimated taxes are a personal bill. So the set-aside belongs on a personal line of credit, not the business one. If you'd rather carry the April bill itself for a few months, paying your tax bill through your line of credit covers that.
The IRS charges an underpayment penalty payment by payment, so each one has to be on time and big enough. You're generally safe if each of the four covers about a quarter of last year's total tax, or a quarter of 110% of it if last year's adjusted gross income, the AGI line on your Form 1040, was over $150,000. Paying 90% of this year's tax in four even pieces also works. Oregon runs its own estimated payments on the same calendar. A bank can also freeze or reduce a line of credit, and the due date doesn't move. Make sure you have enough unused credit to cover the payment, or move that quarter's amount to savings a couple of weeks ahead of the deadline. Who can close your line of credit explains why.
Two weeks before each due date, check that your unused credit is bigger than the "tax owed" number. If it isn't, send your next deposits to savings instead of the line of credit until the gap is covered.