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.
Results
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
workingfigures.com/calculators/tax-set-aside-calculator
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).
FAQ
- 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.