How Much Should a Freelancer Set Aside for Taxes? (2026)

Quick Answer

Freelancers should set aside 25-30% of their net income for taxes. This covers the 15.3% self-employment tax plus federal and state income tax. The exact amount depends on your income and state; a 1099 tax calculator gives your precise quarterly figure.

Why Freelancers Owe More Than Employees

As a W-2 employee, your employer pays half of your Social Security and Medicare taxes. As a 1099 freelancer, you pay both halves. This is the self-employment tax of 15.3%, and it shocks most first-year freelancers. It applies on top of regular income tax.

The Self-Employment Tax Explained

Self-employment tax is 15.3% total: 12.4% for Social Security and 2.9% for Medicare. It is calculated on 92.35% of your net freelance income (income minus business expenses). You can deduct half of the SE tax from your income before calculating income tax.

How Much to Set Aside By Income

Net Freelance Income

Approx Total Tax

Set Aside Per Quarter

|---|---|---|

40,000	~9,000	~2,250
80,000	~22,000	~5,500
120,000	~34,000	~8,500

These are rough estimates for a single filer with a 5% state tax. Your exact figure depends on deductions and state.

2026 Quarterly Tax Due Dates

Freelancers must pay estimated taxes four times a year, not just in April:

• Q1: April 15, 2026
• Q2: June 16, 2026
• Q3: September 15, 2026
• Q4: January 15, 2027

Missing these can trigger underpayment penalties even if you pay in full in April.

How to Reduce Your Freelance Tax

Deduct legitimate business expenses (home office, equipment, software, mileage at 0.70 dollars per mile in 2026). Contribute to a SEP-IRA or Solo 401(k) to reduce taxable income. Track everything, since undocumented expenses cannot be deducted.

Note

This is an estimate using 2026 rules. Self-employment tax and income tax interact in complex ways. Consult a tax professional for your specific situation.