Tax Set-Aside Calculator
The single percentage to move to a separate account every time you get paid — so tax season is a non-event, not a scramble.
Written by Dorothy Ibrahim, 10+ years in banking & finance
Reviewed by Benton Jona, EA (Enrolled Agent) — 2026-07-13
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How we calculate this
This calculator turns your whole tax bill into one set-aside rate — the share of every dollar to move to a separate account the moment a client pays you, so filing is a non-event instead of a scramble. It computes your actual combined burden (self-employment tax, federal income tax, and an optional flat state estimate) and expresses it as a single percentage, plus the dollars to skim from a sample payment and from each month. Set the money aside continuously, then pay it via quarterly estimates.
The formulas
- Federal tax
- self-employment tax + federal income tax on your net profitFrom the shared freelancer engine (Schedule SE + Form 1040), standard deduction and QBI applied.
- Set-aside rate
- (total federal tax ÷ net profit) + your flat state rate
- Per month
- (net profit ÷ 12) × set-aside rate
- From a payment
- payment amount × set-aside rate
- Total tax for the year
- net profit × set-aside rate
Worked example
- With the defaults — $100,000 net profit, single, 2026, no state tax — the freelancer engine returns $14,130 self-employment tax plus $8,235 federal income tax, for $22,365 total federal tax.
- Set-aside rate = $22,365 ÷ $100,000 = about 22.4%. With no state tax, that is the full rate.
- Applied monthly: ($100,000 ÷ 12) × 22.4% ≈ $1,864 to park for taxes each month, and the year’s total tax is $100,000 × 22.4% ≈ $22,365.
- From a single $5,000 client payment, move $5,000 × 22.4% ≈ $1,118 to your tax account the day it lands — do that on every payment and you will have set aside close to exactly what you owe.
Rates, benchmarks & sources
- Estimated Taxes — the quarterly schedule the set-aside funds. — IRS Form 1040-ES
- Self-employment tax: 15.3% on 92.35% of net profit. — IRS Schedule SE (Form 1040)
- 2026 federal income-tax brackets, standard deduction, and QBI threshold. — IRS Rev. Proc. 2025-32
- Tax Guide for Small Business (sole proprietor Schedule C). — IRS Publication 334
Figures current as of 2026-07-02. See our methodology & editorial standards for how constants are versioned and verified.
What this tool doesn’t model
- It assumes a sole proprietor on Schedule C taking the standard deduction with no S-corp election and no other household income; a spouse’s wages, investment income, or itemizing would change the rate.
- State tax is a single flat rate you enter — real state income tax has its own brackets and rules, so the state portion is an approximation.
- The rate depends on an accurate net-profit estimate; if your income or expenses shift during the year, re-run it so the set-aside stays close to your true liability.
- It is an educational estimate for planning, not tax advice, and does not replace a return prepared or reviewed by a CPA/EA.
Frequently asked questions
How much should I set aside for freelance taxes?
Enough to cover self-employment tax plus income tax plus any state tax. For many freelancers that is 25–30% of net profit, but it depends on your income, filing status, and state. This tool computes your specific rate — about 22.4% for a single filer at $100,000 with no state tax — rather than guessing, so you set aside that percentage of every payment.
Should I set aside from gross or net?
From what you are paid, using the rate this tool gives. The rate is calculated against your net profit (after expenses), so applying it to your payments as they arrive puts aside the right total over the year. If your expenses are large, keep them tracked so your net-profit estimate — and therefore the rate — stays accurate.
Where should I keep the money?
In a separate account — ideally a high-yield savings account you do not touch. The whole point is to remove tax money from your spendable balance the moment it arrives, so you are never spending the government’s share by accident. Automating the transfer does more to prevent tax-time disasters than willpower or year-end math.
Do I pay this all at once?
No. The IRS expects quarterly estimated payments (mid-April, June, September, and January). Set aside the percentage continuously, then pay from that account each quarter. Our Quarterly Estimated Tax calculator turns this annual figure into the four specific payments.
Does this rate include state taxes?
Only as the flat state rate you enter. The core rate covers federal self-employment and income tax; add your state’s approximate rate in the field to fold it in. Because real state tax has its own brackets and deductions, treat the state portion as a planning estimate and confirm it against your state’s tables or with a professional.
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Federal figures only unless noted. State taxes vary.