How much should a freelancer set aside for taxes?

You'll hear "save 25% to 30%" everywhere. That rule works for some people and over-saves or under-saves for others. Below are four worked examples with the 2026 federal numbers, so you can see where your profit lands. This post sits in our taxes and expenses hub; for due dates and the penalty rules, read quarterly estimated taxes for freelancers.

Results: four net profits, tax year 2026

Two things stand out. Self-employment tax is the bigger bill at every income up to about $150,000, so a freelancer earning $30,000 still owes over 14% before income tax starts to matter. And the QBI deduction plus the standard deduction keep federal income tax low at modest profits: at $60,000 it's under 6% of profit.

How we got these numbers

1. Net earnings from self-employment = net profit x 92.35%
2. Self-employment tax = 12.4% (up to $184,500) + 2.9% (no cap) of line 1
3. Adjusted gross income = net profit - half of line 2
4. Taxable income before QBI = line 3 - $16,100 standard deduction
5. QBI deduction = the smaller of 20% x (net profit - half of line 2) and 20% x line 4
6. Taxable income = line 4 - line 5
7. Federal income tax = 2026 brackets on line 6
   10% to $12,400 | 12% to $50,400 | 22% to $105,700 | 24% to $201,775
8. Federal total = line 2 + line 7

California add-on: 2025 Schedule X on (line 3 - $5,706 standard deduction),
minus the $153 personal exemption credit. California has no QBI deduction.

Left out: other income, credits, health insurance and retirement deductions,
itemized deductions, the 0.9% Additional Medicare Tax (not reached here), local taxes.

We used California's 2025 rate schedule because the final 2026 schedule wasn't confirmed when we checked on October 18, 2026. California indexes its brackets each year, so the 2026 state figures will be slightly lower than the ones shown.

Worked example: $60,000 of profit

Why our calculator shows a higher number

The self-employment tax calculator uses the same 2026 brackets and standard deduction but leaves out the qualified business income deduction. For the $60,000 example it shows about $12,989 (21.6%) instead of $12,037. That gap is on purpose: QBI has limits at higher incomes and for some service businesses, so the calculator gives a cautious figure. If you're well under the 2026 threshold of $201,750 of taxable income, the table above is closer to what you'll owe. The QBI deduction for freelancers explains when it shrinks.

A set-aside percentage by profit

The set-aside column rounds up to the next 5%. The difference isn't wasted: it covers a year that goes better than planned, and whatever is left after you file is yours. If your state taxes income at a flat rate, add that rate to the federal column for a rough figure.

What moves your percentage up or down

• A W-2 job on top: wages fill the lower brackets first, so freelance profit is taxed at your top rate. Wages also count toward the $184,500 Social Security wage base, which can lower self-employment tax at high wages.
• Married filing jointly: the 2026 brackets and the $32,200 standard deduction are about double, so with one earner the share is lower than the single-filer table.
• Health insurance you buy yourself: the self-employed health insurance deduction lowers income tax, though not self-employment tax.
• Retirement contributions: a SEP-IRA or solo 401(k) contribution lowers income tax for the year you make it.
• Profit above $200,000 (single): the 0.9% Additional Medicare Tax starts on self-employment income above that line.
• Deductions you forget: every $1,000 of business expense you log lowers profit, and with it both taxes. The deductions checklist lists the usual ones.

From a percentage to a monthly habit

1. Pick your percentage from the table, using last year's profit if this year is hard to predict.
2. Each time a client pays, move that share of the payment into a separate savings account. If a payment mostly covers costs you passed through, apply the percentage to what is left after those costs.
3. Pay your quarterly estimate from that account on April 15, June 15 and September 15, 2026, and January 15, 2027.
4. Once a quarter, check your real profit so far. If it's running well ahead of plan, raise the percentage for the rest of the year.

Doing this in SoloWOS

The Expenses > Reports page in SoloWOS puts paid invoices next to the costs you log, shows profit for each month and the year so far, and suggests an amount to set aside at the percentage you choose (25% until you change it). Change the percentage on the same page once you've found your row above. You can log business expenses with receipts as they happen, so the profit figure stays current. Expenses is included in every plan; Basic is $2/month after a 14-day free trial (card required), and Solo is $15/month.

These are planning estimates from the 2026 federal figures and the 2025 California schedule, for a single filer with no other income. They aren't tax advice; your return can differ because of credits, other income and state rules.