How much should I set aside for 1099 taxes?
The internet’s stock answer is “save 25–30%.” It’s not wrong as a panic floor, but it’s nobody’s actual number: federal effective rates for a single filer with only self-employment income run from the mid-teens at modest profits to the mid-twenties at six figures — before state tax, which adds zero to 13%+ depending on where you live. The table below shows real 2026 federal figures, computed by the same engine as the calculator; your own inputs (filing status, kids, a W-2 job, expenses) move the answer, which is the point of computing instead of guessing.
Preset: enter your numbers — your effective rate appears under “See the full math”
How it works
- Open this page — the estimator is already set up for "How much should I set aside for 1099 taxes?".
- Enter your expected 2026 income and business expenses. Estimates update as you type.
- Add a W-2 job, kids, or last year’s tax if they apply — the safe-harbor math handles the rest.
- Read off your quarterly payment and the remaining IRS deadlines. Nothing you typed leaves your device.
Why the flat 30% rule misleads in both directions
It overshoots for most solo freelancers: at $40,000 of profit, federal tax is well under 20% effective, because the standard deduction and QBI deduction shield a large slice, and SE tax’s half-deduction feeds back. Saving 30% there means lending yourself nothing for months. It undershoots for the W-2-plus-side-gig case: side profit stacks on top of salary at your marginal bracket plus full SE tax — commonly 30–40% marginal — with no deduction shield left. Same “1099 income,” opposite errors. The fix is embarrassingly simple: compute your case.
Then add state. Some states tax wages at 0% — Texas and Florida among them — while California’s top brackets exceed 13%. A reasonable pattern: compute your federal rate here, add your state’s effective rate from its own tables (most state revenue sites publish calculators), and round up a point or two for margin.
The mechanics that make setting aside painless
Move the slice the day money arrives, not at quarter-end — a percentage of each deposit into a separate high-yield savings account labelled “taxes” (the interest is yours to keep; the principal never felt like yours). Automate it if your bank supports rules. At each IRS deadline, pay from that account and let the remainder keep accruing toward April. Freelancers who fail at quarterly taxes almost never fail at math — they fail at having spent the money by the time the math came due.
2026 federal tax by profit level (single, no other income)
| Item | Detail |
|---|---|
| $20,000 net profit | $3,025 federal (15.1% effective) — $756/quarter |
| $40,000 net profit | $7,427 federal (18.6% effective) — $1,857/quarter |
| $60,000 net profit | $12,037 federal (20.1% effective) — $3,009/quarter |
| $100,000 net profit | $22,365 federal (22.4% effective) — $5,591/quarter |
| $150,000 net profit | $37,608 federal (25.1% effective) — $9,402/quarter |
Computed by this site’s engine from the 2026 IRS tables (standard deduction, QBI, SE tax with the ½ deduction — the same math as the calculator above). Add your state’s income tax; personal circumstances shift these meaningfully — compute your own case above.
Good to know
- Percentages beat dollar targets for volatile income: 20% of whatever arrives self-adjusts; “$800 a month” breaks the first slow month.
- Your set-aside rate is the effective rate (total tax ÷ total income) — not your top bracket. The bracket number overstates what you owe on the whole.
- Re-check your rate mid-year if income doubles or a contract dies — five minutes here beats an April surprise in either direction.
Frequently asked questions
Is 30% ever the right number?
Sometimes — a well-paid W-2 filer’s side income sits near 30–40% marginal (bracket + SE tax), and high-earning freelancers in taxed states genuinely reach 30%+ all-in. That’s the point: 30% is one case’s answer, not a rule. Compute the federal side above; the “full math” panel shows both your effective and marginal rates.
Should I set aside from gross income or profit?
Tax applies to profit, but discipline works better on receipts: a smaller percentage of every gross deposit is easier to automate than a bigger percentage of a profit number you only know quarterly. Back the rate out: if expenses run 25% of income and your effective tax rate is 20% of profit, set aside 15% of every gross deposit.
What about retirement — before or after the tax slice?
Solo 401(k) or SEP-IRA contributions reduce taxable income, so retirement saving lowers the tax number itself (a feedback this estimator doesn’t model — its figure is conservative for savers). Practical order: set aside taxes first at the computed rate, fund retirement from what remains, and let the deduction show up as a smaller April bill.