Freelancer Tax Set-Aside Calculator

How to calculate freelancer taxes?

Self-employed individuals must cover both the employer and employee portions of Social Security and Medicare, plus standard income tax.

Formula: Tax Due = (Gross Revenue - Deductible Expenses) × Effective Tax Rate

Using the Tax Set-Aside calculator: an example

Let's look at a freelancer earning $80,000 with $10,000 in expenses and a 30% combined tax rate.

Step-by-step calculation:

1. Subtract expenses from revenue ($70,000 net profit).
2. Multiply profit by tax rate ($21,000 annual tax).
3. Divide by 4 for quarterly payments ($5,250 per quarter).

Frequently Asked Questions

What is the self-employment tax rate?

The federal self-employment tax rate is 15.3%, which covers Social Security and Medicare.

When are quarterly taxes due?

Estimated taxes are typically due April 15, June 15, September 15, and January 15.

What expenses can I deduct?

Common deductions include home office costs, equipment, software, and professional insurance.