How much should a freelancer set aside for taxes?
The short answer is 25 to 30% of each payment for federal tax, plus your state's rate. The right figure for you depends on your profit and filing status.
Federal tax by profit, 2026
These figures assume freelance profit is your only income and you take the standard deduction. The percentage is the share of profit to set aside.
| Profit | Single | Married filing jointly |
|---|---|---|
| $20,000 | $3,025 (16%) | $2,826 (15%) |
| $40,000 | $7,427 (19%) | $6,050 (16%) |
| $60,000 | $12,037 (21%) | $10,363 (18%) |
| $80,000 | $16,647 (21%) | $14,854 (19%) |
| $100,000 | $22,365 (23%) | $19,464 (20%) |
| $150,000 | $37,608 (26%) | $30,990 (21%) |
| $200,000 | $53,431 (27%) | $44,706 (23%) |
The share rises with income because income tax brackets climb, while self-employment tax stays at about 14% of profit until the Social Security wage base of $184,500. Use the 1099 tax calculator for your own numbers.
Add your state
Nine states have no tax on wage income: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming. Elsewhere, add roughly 3 to 7% for state tax, more in high-tax states such as California and New York, and check for city taxes too.
A system that works
- Open a separate savings account just for tax. A high-yield account earns interest while the money waits.
- Move your percentage the day each payment lands. Do it before you spend anything.
- Pay the IRS each quarter from that account. See the 2026 due dates.
- Review mid-year. If income is higher than planned, raise the percentage.
Why freelancers owe more than employees
Self-employment tax covers both the employee and employer halves of Social Security and Medicare, 15.3% instead of 7.65%. In return you can deduct half of it, claim business expenses and take the 20% qualified business income deduction. See the self-employment tax calculator for the details.
Ways to owe less
- Track every business expense: software, equipment, a home office, business mileage, phone and internet use, training.
- Contribute to a SEP-IRA (up to $72,000 for 2026, limited to a share of profit) or solo 401(k) to cut income tax.
- Deduct self-employed health insurance premiums if you are not eligible for an employer plan.
Figures for tax year 2026. See figures and sources. General information, not tax advice.