How much should I set aside for taxes?
Enter what you typically get paid and how often. You get one number to act on: the percentage to move out of every deposit, in dollars, plus what each quarterly payment should be.
What you get paid
Set aside
17% of every payment
That's $254 out of each week. Move it the day the money lands.
- Gross for the year
- $78,000
- Net profit after expenses
- $66,300
- Self-employment tax
- $9,368
- Federal income tax
- $3,824
- Total tax for the year
- $13,192
- Each quarterly payment
- $3,298
Quarterly estimates are due around April 15, June 15, September 15 and January 15.
How much to set aside, by state
Your reserve percentage depends on where you file. Pick your state for a rate that already includes state income tax.
Why 30% is the wrong answer for most people
The standard advice — save 30% — is a hedge that is too high for low earners and too low for high earners in states with income tax. Your real rate depends on profit after expenses, filing status, whether you have W-2 income, and where you file. Someone netting $28,000 is nowhere near 30%; someone netting $180,000 in California is well past it.
The mechanic matters more than the number. Tax problems are almost never a math failure; they are a cash failure. The money arrives, it looks like income, it gets spent, and the bill shows up in April against an account that has already moved on.
The fix is to make the transfer automatic and same-day. Money that leaves the operating account the moment a deposit lands never feels like yours, never gets budgeted, and is still there when the quarterly payment is due.
Frequently asked questions
How much should I set aside for taxes?
For most self-employed people, 25-30% of net profit covers self-employment tax and federal income tax. Add your state rate on top. The calculator above gives a percentage based on your own income and expenses rather than a rule of thumb.
Should I save a percentage of gross or net?
Tax is owed on net profit, but it is far easier to move a fixed percentage of each deposit the day it lands. This tool converts your tax bill into a percentage of gross so you can automate the transfer without doing math on every payment.
Where should the tax money go?
A separate savings account you do not carry a card for. Treat it as the IRS's money already. Paying quarterly estimates directly out of that account keeps the balance honest and avoids the temptation to borrow against it in a slow month.
What happens if I do not set anything aside?
You still owe the tax, plus an underpayment penalty if you owed $1,000 or more and did not make estimated payments. The penalty is calculated like interest, so it grows the longer the balance sits unpaid.
Do I need to set aside money if I also have a W-2 job?
Often less, because withholding from your job can cover part of the self-employment bill. You can also raise your W-2 withholding instead of making estimated payments, which is a simpler option for people with modest side income.
Does the set-aside percentage change by state?
Yes. In the nine states with no income tax the reserve is usually 25-30% of profit; in high-rate states it can run past 35%. Pick your state below for a rate that already includes the state layer.
Estimates only, using projected 2026 federal figures. Not tax advice.