1099 Tax Set-Aside Calculator
Work out what percentage of your 1099 freelance income to set aside for taxes — self-employment plus income tax — so nothing surprises you at filing.
How it works
SE tax = 15.3% × (income × 92.35%) · Federal income tax = (income − ½ SE tax) × bracket · State tax = income × state rate · Set-aside % = total ÷ income
Freelancers and contractors get paid without withholding, so you must reserve your own tax as money comes in. The three pieces are self-employment tax (15.3%), federal income tax at your marginal rate, and state income tax. A common rule of thumb is 25–30%, but the right figure depends on your bracket and state — this tool computes it from your actual numbers so you neither over-save nor come up short.
Worked example
On $50,000 of net 1099 income, SE tax is about $7,065; half of it ($3,532) is deducted, leaving $46,468 taxed at a 12% federal bracket = $5,576, plus 5% state ($2,500) — roughly $15,141 total, or about 30% of income to set aside.
Frequently asked questions
Is 30% enough to set aside?
For many freelancers in low-to-mid brackets, 25–30% covers it. Higher earners or those in high-tax states should reserve more — run your own numbers rather than relying on the rule of thumb.
Where should I keep the money?
A separate high-yield savings account works well, so the reserve is not mixed with spending money and earns interest until quarterly estimates are due.
Do I pay this all at tax time?
No — the IRS expects quarterly estimated payments. Setting the money aside is step one; use the safe-harbor calculator to size the four installments.
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Educational estimate using simplified US federal rules — ignores state tax, credits and your full situation. Not tax advice; confirm with a CPA or IRS guidance.