How much should I set aside for taxes?

A quick US estimate for freelancers and sole proprietors. Self-employment tax is 15.3% on 92.35% of net profit (Social Security part capped at a yearly wage base, ignored here for simplicity). Add your own expected income-tax rate. This is a planning estimate, not tax advice.

Income or invoice amount Business expenses on it Your expected income tax rate (%) State tax rate (%)

Set aside

Rule of thumb

Most US freelancers land between 25% and 30% of net profit.
Move that share into a separate savings account the day each invoice is paid.
Quarterly estimated payments are due mid-April, mid-June, mid-September and mid-January.

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