Is the 30% rule actually wrong?

It is a decent default and a bad rule. At $40k profit your real combined rate can sit near 20%; at $200k in a high-tax state it passes 40%. Ten points of error on six figures is real money either direction.

Where should the set-aside money live?

A separate high-yield savings account that only receives transfers and only pays taxes. The physical separation is the feature: money you can see in checking is money you will spend.

When do I move the money?

The day the invoice gets paid, automatically if your bank allows rules. Set-aside discipline beats set-aside math; the best percent is the one that actually gets moved.

Calculators

Tax set-aside calculator

Everyone repeats "save 30% for taxes". For some freelancers that is too much, for others dangerously little. This computes your actual combined rate and turns it into one rule: the percent to move every time an invoice gets paid.

Your numbers

Expected annual net profit

Revenue minus expenses, your Schedule C bottom line.

State income tax rate

Your state's rough rate. Zero for TX, FL, WA and other no-income-tax states; 5-10% covers most of the rest.

Sample invoice amount

Any typical invoice, to see the rule in dollars.

What the ledger says

Move to the tax account31%of every invoice

On your sample invoice: $930
Monthly equivalent: $2,269
Federal (SE + income tax): $22,732
State estimate: $4,500

Estimate, not advice

The formula

Federal = the same 2025 single-filer engine as the quarterly calculator. State = profit × your flat rate. Recommended percent = combined tax ÷ profit, rounded up to a whole percent.

What this ignores

Progressive state brackets (the flat rate is an approximation), local/city taxes, and other income shifting your federal brackets. Round up, never down: an over-funded tax account becomes a bonus in April.

Uses 2025 IRS constants (standard deduction $15,000; Social Security wage base $176,100).

Field notes

Is the 30% rule actually wrong?: It is a decent default and a bad rule. At $40k profit your real combined rate can sit near 20%; at $200k in a high-tax state it passes 40%. Ten points of error on six figures is real money either direction.
Where should the set-aside money live?: A separate high-yield savings account that only receives transfers and only pays taxes. The physical separation is the feature: money you can see in checking is money you will spend.
When do I move the money?: The day the invoice gets paid, automatically if your bank allows rules. Set-aside discipline beats set-aside math; the best percent is the one that actually gets moved.