How Much to Set Aside for Taxes
One number to remember: the share of every client payment that belongs to the IRS. Move it the day the money lands and April stops being scary.
- Spend $2,074
- Tax envelope $426
From that $2,500 payment, move $426 to your tax account.
| Estimated tax for the year | $11,922 |
| Monthly set-aside | $993 |
| Share of net profit | 20.0% |
Set-aside percentages by income (2026, 15% expenses)
| Annual 1099 income | Federal set-aside |
|---|---|
| $30,000 | 14% |
| $50,000 | 16% |
| $75,000 | 17% |
| $100,000 | 18% |
| $150,000 | 20% |
| $200,000 | 22% |
| $300,000 | 23% |
Why the percentage climbs: self-employment tax is roughly flat at 14.1% of profit until the Social Security wage base, while income tax is progressive, so each extra dollar gets taxed at a higher bracket. The table updates with the filing status and expense share you chose above.
A simple system that works
- Open a separate savings account and name it "Taxes".
- Every time a client pays, transfer the percentage above. Before paying yourself.
- Pay the IRS from that account on each quarterly due date.
- Recalculate whenever your income forecast changes by more than about 20%.
Questions freelancers ask
How much should I set aside for taxes on 1099 income?
For federal taxes alone, most freelancers need 20–30% of every payment received, depending on income and expenses. Lower earners with healthy expenses can be under 20%; high earners in the 32%+ brackets often need 35% or more. Add your state rate on top.
Should I set aside a percentage of gross or net income?
This calculator gives you a percentage of gross payments, because that is what you see when a client pays. The tax is actually computed on net profit, so the percentage already accounts for your expected expenses.
Is 30% enough to set aside for taxes as a freelancer?
For most single filers earning under about $110,000 in profit with no state income tax, 30% of gross is more than enough federally. Use the calculator with your own numbers; over-saving is harmless, but under-saving means an April bill and possibly a penalty.
Where should I keep money set aside for taxes?
In a separate account you do not spend from, ideally a high-yield savings account so it earns interest until each quarterly due date. Move the set-aside amount the day a client payment lands.