How much should I set aside for taxes?
Enter what you earn — Keldwell shows the exact slice to set aside, what you owe each quarter, and what's genuinely safe to spend.
How much should a self-employed person set aside for taxes?
A common rule of thumb is to set aside 25–30% of your net self-employment income for federal taxes — but the honest answer depends on your total income, filing status, and state. This calculator estimates it precisely by adding the two taxes a freelancer or 1099 contractor actually owes.
How this is calculated
1. Self-employment tax. 15.3% (12.4% Social Security up to the annual wage base + 2.9% Medicare, plus 0.9% extra Medicare on higher earnings) on 92.35% of your net profit. See IRS: Self-Employment Tax.
2. Federal income tax. On your taxable income after the standard deduction, half your self-employment tax, and a simplified 20% Qualified Business Income (QBI) deduction. We estimate only the marginal tax your self-employment income adds, so the set-aside % reflects your real situation. See IRS: QBI Deduction.
In a high-tax state? Try the California version, which adds state tax.
Then set the money aside as you go and pay it in four quarterly estimated payments. New to this? Start with how much to set aside for taxes.
Frequently asked questions
Is 30% enough to set aside for 1099 taxes? For many freelancers earning under six figures, 25–30% covers federal self-employment + income tax. Higher earners and those in high-tax states should set aside more — this tool gives your specific number.
Do I have to pay quarterly? If you expect to owe $1,000+ for the year, the IRS generally expects quarterly estimated payments to avoid an underpayment penalty.
Does this include state taxes? Only if you enter a state rate. It's a flat estimate on your self-employment income; your actual state tax may differ.