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US · Tax Year 2026
IRC §1401 · Verified

How much to set aside for taxes

For 1099 and self-employed earners — including gig and delivery work, where income arrives in irregular payments and nothing is withheld. The percentage of each payment that is not yours, calculated rather than assumed. Most of the advice online gives a single number, and it is wrong by a wide margin at both ends of the income range.

Prepared for the 2026 tax year.

The rules for the 2026 tax year are published during 2025 and 2026 — the adjusted figures first, the explaining publications as the year goes on — and the return they govern is filed in 2027.

What you expect to earn after business expenses. An estimate is fine — the percentage moves slowly between one bracket and the next.
Wages have tax withheld already, and they also use up part of the Social Security wage base — which lowers the self-employment tax on the freelance side.
Changes the federal brackets, the standard deduction, and the additional Medicare threshold — $200,000 single, $250,000 joint.
Optional. Enter one and the page will show what to move out of it.
Optional. State income tax is not deducted for self-employment tax purposes, but it does come out of the same money.

Your result

Tax year 2026
Set aside this much of your income 0% These are two views of the same number: the rate as a percentage, and as a period of the year.
That is, out of every $1,000 you invoice $0
Out of the payment entered —
Total tax for the year $0
Self-employment tax $0
Federal income tax $0
State income tax $0

What comes next? This page gives the percentage to hold back. It does not tell you when the money is due. Four payments a year, and missing one has its own penalty. The Quarterly Tax Calculator carries the four due dates, the safe-harbour rules, and what the underpayment penalty actually costs.

Choosing how to be paid? The 1099 vs W-2 Calculator compares the two on the same gross figure, including the half of FICA you stop paying as an employee.

Had 24% taken out of a payment? The 1099 Withholding Calculator explains why, and how to stop it happening on the next invoice.

Where these figures come from

Brackets
Standard deduction
$16,100 single · $32,200 joint
SECA
15.3% on 92.35% · IRC §1401, §1402(a)(12)
Wage base
$184,500 ·
Deductible half
IRC §164(f)
State income tax
Each state's own 2026 schedule, held in states.js with its source and the date it was verified — shown on the result when a state is selected.
Verified
2 October 2026
How this is worked out

The percentage is not a constant. It is whatever makes the year's tax divided by the year's income, and both parts move with how much you earn — which is why a single number cannot be right for everyone.

Net earnings from self-employment
Expected profit × 92.35%
IRC §1402(a)(12)
Social Security wage base still available
max(0, $184,500 − W-2 wages)
SSA release, 24 Oct 2025
A W-2 job consumes part of the base first, so it reduces the self-employment tax here.
Self-employment tax
min(Net earnings, wage base available) × 12.4% + Net earnings × 2.9% + Additional Medicare
IRC §1401
Taxable income
max(0, Expected profit − Self-employment tax ÷ 2 − Standard deduction)
IRC §63 · §164(f)
The deductible half is what keeps the two taxes from stacking on the same dollars.
Federal income tax
Brackets applied band by band to taxable income
Rev. Proc. 2025-32
Total tax for the year
Self-employment tax + Federal income tax
Form 1040 · Schedule SE
State income tax from the state you pick, held in states.js with its source and the date it was verified. Nine states levy none; three are absent because no verified 2026 rate exists for them yet.
Set-aside percentage
Total tax ÷ Expected profit
Derived
The number this page exists for. Computed exactly it runs from about 14% at $15,000 of profit to about 31% at $300,000. It is not a rule of thumb: the progressive brackets push it up as income rises, while the Social Security wage base pushes part of it back down.
Out of every $1,000 invoiced
Set-aside percentage × $1,000
Derived — the same figure in the units a freelancer actually thinks in
Per payment
Payment received × Set-aside percentage
Derived

The formulas are shown as the authority defines them, in its own terms — the arithmetic is not copyrightable and the rates are public-domain US government material. What these lines cannot tell you is where your figures came from; that is what the table above is for.

Enter what you expect to earn and press Calculate.

Frequently asked questions

Does filing status change the percentage?

Yes, by several points, and it is the input most people leave out. On $120,000 of profit the set-aside is about 27% for a single filer and about 22% for a couple filing jointly — the same income, five points apart, because the brackets and the standard deduction are wider for a joint return. Set aside for the single schedule when you file jointly and you tie up several thousand dollars you did not owe.

Is state income tax included?

Only if you pick a state. Self-employment tax is federal, but state income tax comes out of the same money, and in a state like Ohio or Maryland it is a real part of the figure. Choose your state and the total and the percentage both move. Nine states levy no income tax at all, and they appear in their own group in the list. Where this tool holds no verified rate for a state, it adds nothing and says so — it does not guess a rate to fill the gap.

How much should I set aside?

It depends on your income, and that is the whole point. Calculated exactly for 2026, the percentage runs from roughly 14% at $15,000 of profit to about 31% at $300,000. The progressive brackets push it up as you earn more; the Social Security wage base stops charging 12.4% above $184,500, which flattens it at the top. There is no single figure that is correct across that range.

Everyone says to put aside 30%. Is that wrong?

It is wrong in both directions, and that matters. At $15,000 of profit the correct figure is nearer 14% — set aside 30% and you have locked away more than twice what you owe, out of income you probably needed to live on. Above roughly $200,000 the true rate passes 30% and keeps climbing, so there the rule understates it. The 30% figure is a rule of thumb that happens to be closest to right in the middle. It is not a calculation.

Should I set aside from each payment, or save it up?

From each payment. Estimated tax is due quarterly, but freelance income does not arrive quarterly — it arrives when clients pay. Taking the percentage out as each payment lands means the money is already in the account when a due date comes round. Saving it up means finding a quarter's tax in whichever month happens to be thin, which is how estimated payments get missed and penalties start.

Does this include state tax?

Yes, once you pick a state. Choose it above and both the total and the percentage include that state's own 2026 income tax — the rate and the date it was verified appear on the result. Nine states levy no income tax on wages at all and appear in their own group. Where this tool holds no verified rate for a state yet, it adds nothing and says so rather than guessing, so the figure stays federal for that state.

Where should I keep the money?

A separate account. The purpose of a set-aside is that the money is visibly not available — if it sits in the account you pay bills from, it gets spent in a slow month and the estimated payment is short. A second savings account at the same bank is enough; it needs no interest and no features, only distance.

What if my income turns out different from what I estimated?

Recalculate. The percentage is a planning figure and it moves as the estimate moves — which is another reason not to treat any percentage as fixed. If the year goes better than expected, the right response is a larger set-aside on the later payments, not a catch-up in April.

I am an independent contractor — is this different for me?

No, the arithmetic is the same: your profit, the self-employment tax on it, and the income tax on top. What differs is who the client thinks you are. If the work is controlled by the payer you may in fact be an employee, and the company issuing the 1099 may be misclassifying you — which changes who owes the employment tax. That is a question worth settling before you rely on this percentage, because the answer can move the liability to the other party.

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