StashlyFreelancer tax guide
How much should freelancers set aside for taxes?
Short answer: aim to set aside 25–30% of your net profit — what you keep after expenses. Here's why that number is higher than most people expect, a worked example, and the 2026 deadlines to hit.
The quick rule
Set aside 25–30% of your net profit (income minus deductible business expenses). Go toward the lower end if you earn less or claim credits; go higher (35%+) if you're a high earner or live in a state with income tax. Then move that money to a separate savings account every time you get paid.
Why it's more than your tax bracket
The mistake that catches new freelancers off guard is setting aside only what they think their income-tax bracket is. But when you're self-employed you owe two taxes, not one:
1. Income tax — the same federal (and state) income tax everyone pays, based on your taxable income and bracket.
2. Self-employment tax — this is the one that surprises people. When you have a regular job, your employer quietly pays half of your Social Security and Medicare taxes. As a freelancer, you're both the employer and the employee, so you pay both halves: a 15.3% self-employment tax (12.4% for Social Security + 2.9% for Medicare) on your net earnings. That's on top of income tax.
This is why "just set aside 15%" leaves people short. Self-employment tax alone is already 15.3% — before a single dollar of income tax.
A couple of details that soften it: self-employment tax is calculated on about 92.35% of your net earnings (not the full amount), and you get to deduct half of your self-employment tax when figuring your income tax. Stashly and the rules bake this in — you don't have to do it by hand — but it's worth knowing why the 25–30% range works.
A worked example
Say you're a freelancer who brings in $60,000 for the year and has $10,000 in deductible business expenses (software, gear, a home-office share, fees). Your net profit is $50,000 — and that's the number your taxes are based on, not the $60,000.
| Item | Amount |
|---|---|
| Gross income | $60,000 |
| Deductible expenses | −$10,000 |
| Net profit | $50,000 |
| Self-employment tax (~15.3% of 92.35% of net) | ≈ $7,065 |
| Federal income tax | Varies by bracket & filing status |
| Set aside at 30% of net profit | $15,000 (~$3,750/quarter) |
Self-employment tax by itself is about $7,065 here — and income tax stacks on top of that. Setting aside 25–30% of the $50,000 net profit (so $12,500–$15,000) covers both with a little breathing room. Split across the year, that's roughly $3,100–$3,750 per quarter.
Run your own numbers in the free calculator →
Notice it's a percentage of net profit, not income
Every dollar of legitimate deductible expense lowers your net profit, which lowers what you owe. That's why tracking expenses isn't just bookkeeping — it directly cuts your tax bill. The freelancer who tracks a $10,000 in expenses on that $60,000 pays tax on $50,000; the one who doesn't track them pays on the full $60,000.
When do you actually pay it? The 2026 quarterly deadlines
The IRS wants this money throughout the year, not in one lump next April. If you expect to owe $1,000 or more for the year, you're generally expected to make quarterly estimated tax payments. For tax year 2026:
| Quarter | Income period | Payment due |
|---|---|---|
| Q1 | Jan 1 – Mar 31, 2026 | April 15, 2026 |
| Q2 | Apr 1 – May 31, 2026 | June 15, 2026 |
| Q3 | Jun 1 – Aug 31, 2026 | September 15, 2026 |
| Q4 | Sep 1 – Dec 31, 2026 | January 15, 2027 |
Miss them and you can owe an underpayment penalty even if you pay in full at tax time. One safe-harbor shortcut: if you pay at least 90% of this year's tax, or 100% of last year's total tax (110% if your income is higher), you generally avoid the penalty.
The habit that makes this painless
Knowing your number is only half the job — the other half is not spending it. The single most common reason freelancers get caught short is that their tax money sits in their checking account and quietly disappears. The fix: open a separate savings account just for taxes (a high-yield one, ideally), and every time a client pays you, move your set-aside percentage straight into it. When a deadline arrives, the money's already there.
Stop guessing your tax number.
Stashly is a simple spreadsheet that tracks your income and expenses and shows exactly what to set aside — by quarter — plus what's safe to pay yourself. One file you own. Works in Excel & Google Sheets.
Get Stashly — $14Frequently asked
Is 30% enough to set aside?
For many freelancers earning roughly $40k–$100k in net profit, 25–30% covers federal income tax plus self-employment tax. If you're in a state with income tax, add a few points. High earners should lean toward 35%.
Do I set aside on gross income or net profit?
Net profit — your income after deductible business expenses. That's what your taxes are actually based on.
What if my income is unpredictable?
That's exactly why a percentage works better than a flat amount. Set aside the same percentage of every payment as it comes in, and it self-adjusts to a big month or a slow one.
Stashly is a self-help planning tool, not a CPA, accountant, or tax advisor, and does not provide tax, legal, or financial advice. All figures here are general estimates and depend on your income, bracket, deductions, filing status, and state. Always confirm your actual obligations with a qualified tax professional.