How much should freelancers set aside?
A common starting point is 25–35% of net profit for combined federal income tax, SE tax, and state tax — then refine with a calculator. High earners in high-tax states may need more; low earners in no-tax states may need less.
Safe harbor beats guessing
IRC §6654 safe harbor: pay 100% of last year’s total tax (110% if prior-year AGI exceeded $150,000) or 90% of the current year’s tax — whichever method you use, paying at least the required amount helps avoid underpayment penalties.
Frequently asked questions
Is 30% always enough?
No — run your numbers. Effective rates vary widely by profit, filing status, and state.
What if I also have a W-2 job?
Enter W-2 wages so Social Security wage base is shared correctly.
Can an S-Corp reduce SE tax?
Sometimes — our optional S-Corp compare shows a planning estimate; reasonable salary rules apply.
Is this advice?
No. Planning estimates only.