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How much tax should you set aside from every payment?
Set aside enough to cover self-employment tax and federal income tax, plus your state's tax if it has one. For a single filer with $60,000 of net profit in 2026, that's about 22% of every payment. Put in your own profit below for your number.
An estimate, not tax advice. Check with a tax professional or the IRS before you rely on it.
Your numbers
Example numbersUS dollars, 2026tax year, single filer, no wages from a job. It’s an estimate, not tax advice.
What you expect to keep after business expenses, before tax. Example: 60,000.
Type the rate for your state. Leave at 0 if your state has no income tax or you want the federal figure only. We don't look it up.
Turns the percentage into dollars. Example: 1,000.
Example result
Set aside about 22 percent of every payment. On a US$1,000 payment that is US$220.
Rounded up from 21.6% so the estimate errs on the side of keeping a little extra.
| Tax | For the year |
|---|---|
| Self-employment tax | US$8,478 |
| Federal income tax | US$4,511 |
| State, at 0% | US$0 |
| Total | US$12,989 |
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Tax set-aside questions, answered
How much tax should I set aside for 1099 income?
Enough to cover three things: self-employment tax, federal income tax and any state income tax. Self-employment tax is 15.3% (12.4% Social Security plus 2.9% Medicare) on 92.35% of your net earnings, and the Social Security part stops at $184,500 for 2026. Federal income tax is then worked out on your profit after half of the self-employment tax and the standard deduction. Your state is a rate you type in.
Use net profit, which is what you earn after business expenses, not the full payment. The percentage here is a share of profit, so applying it to a whole payment puts away a little more than you need if you have costs. That's the safe side.
What percentage should a freelancer set aside?
There's no single percentage, because federal income tax rises in steps as your profit does. On the 2026 IRS figures, for a single filer with no state income tax, the calculator gives about 20% on $40,000, 22% on $60,000, 26% on $100,000 and 29% on $150,000 of net profit. Add your state's rate on top if it has an income tax.
If you're unsure, round up. If you have other income, credits or deductions, the real figure will be different, so check with an accountant or the IRS.
Why set it aside every time you get paid?
Tax on freelance income isn't taken out before the money reaches you, and the bill comes later. The IRS says you generally have to make estimated tax payments if you expect to owe $1,000 or more when you file, so money in your account isn't all yours.
Moving the percentage across as each payment lands is easier than finding a lump sum later, and it stops the tax money getting spent as everyday cash.
Handl can send you a reminder to move it every time an invoice is paid. It reminds you, and you make the transfer.
How this is worked out
Self-employment earnings = net profit × 92.35%.
Self-employment tax = earnings (up to $184,500) × 12.4% + earnings × 2.9%, plus 0.9% of earnings over $200,000 (Additional Medicare Tax, single filer). No self-employment tax under $400 of earnings.
Federal income tax = the single-filer brackets applied to net profit, less half of the 12.4% + 2.9% self-employment tax, less the $16,100 standard deduction.
State= net profit × the % you type in.
Set aside= (self-employment tax + federal income tax + state) ÷ net profit, rounded up to a whole percent. The dollar figure is your payment × that percentage.
Worked example with the Example numbers: $60,000 × 92.35% = $55,410. Self-employment tax $8,477.73. Federal income tax $4,511.34. Total $12,989.07, which is 21.6% of profit, rounded up to 22%. On a $1,000 payment that’s $220.
What it leaves out. Other income, wages from a job, credits, retirement contributions, the qualified business income deduction and other filing statuses. Most of these would lower the number, but some could raise it.
Figures from IRS.gov, checked 1 November 2026. Tax year 2026, single filer. Tax law and figures change, so check them again before you rely on them.
- Self-employment tax (Social Security and Medicare taxes): 15.3% rate (12.4% + 2.9%), 2026 Social Security wage base $184,500, Additional Medicare Tax 0.9% over $200,000 for single filers.
- Topic no. 554, Self-employment tax: 92.35% of net earnings, $400 minimum, deduct one-half of the tax.
- IRS tax inflation adjustments for tax year 2026: 2026 single standard deduction $16,100 and the 2026 single-filer brackets.
- Estimated taxes: Generally pay estimated tax if you expect to owe $1,000 or more.
This is for US self-employed people filing as a single filer. It isn’t tax advice, it’s a rough estimate from the numbers you type in, and it doesn’t know your whole situation. Amounts are US dollars and nothing is converted.
Where Handl comes in
Handl sends a reminder with the amount to move every time an invoice is paid. It reminds you, and you make the transfer. Handl never moves or holds the money.
Prefer a spreadsheet?
Put the tax money, and everything else coming in and out, on one sheet. The free 13-week forecast is a spreadsheet you fill in.
See it on your own projects.
Handl turns logged hours and costs into invoices and a live margin, so you are not rebuilding this in a spreadsheet every time.
Not accounting advice. This is an estimate worked out from the numbers you type in, nothing more.