Freelance Quarterly Taxes: How Much to Set Aside

When you were employed, tax left your pay before you ever saw it. Freelancing removes that mechanism and replaces it with nothing. Every dollar a client sends you looks like yours, right up until April, when a meaningful fraction of it turns out never to have been.

The US tax system’s answer is estimated quarterly payments: you pay in as you earn, four times a year, rather than in one lump at filing. This guide covers who has to, how much, when, and — most usefully — the rule that means you don’t have to forecast the year accurately to stay out of trouble.

This is a planning guide for US sole proprietors and single-member LLCs, not tax advice. Figures below are for tax year 2026 and are cited to their source; check them against the current IRS documents before you rely on them, because several of them move every year.

Do you have to pay quarterly?

Two thresholds decide it.

• $400. If your net earnings from self-employment are $400 or more, you owe self-employment tax and must file a return reporting it (IRS Topic no. 554).
• $1,000. If you expect to owe at least $1,000 in tax for the year after subtracting withholding and refundable credits, you are generally expected to pay estimated tax during the year (2026 Form 1040-ES, General Rule).

A common and legitimate escape hatch: if you have a day job alongside the freelancing, you can increase the withholding on that paycheck instead of making separate estimated payments. Withholding is treated as paid evenly across the year regardless of when it actually happened, which makes it a genuinely more forgiving mechanism than quarterly payments.

The two taxes you are paying

Freelance income gets hit twice, and confusing the two is the root of most underestimates.

1. Self-employment tax

This is Social Security and Medicare — the part an employer would normally have split with you. Now you pay both halves.

• The rate is 15.3%: 12.4% Social Security plus 2.9% Medicare.
• It applies to 92.35% of your net self-employment earnings, not 100%.
• So the effective bite is 0.9235 × 0.153 = 14.13% of net profit.
• The Social Security portion stops at the wage base — $184,500 for 2026, up from $176,100 in 2025. The Medicare portion never stops.
• An Additional Medicare Tax of 0.9% applies above $200,000 (single), $250,000 (married filing jointly) or $125,000 (married filing separately). Those thresholds are set in statute and are not indexed for inflation.
• You may deduct one-half of your self-employment tax when figuring adjusted gross income.

(Sources: IRS Topic no. 554 and the 2026 Form 1040-ES. Note that the IRS’s own self-employment tax landing page was still displaying the 2024 wage base at the time of writing — take the wage base from Form 1040-ES or the Schedule SE instructions instead.)

2. Federal income tax

Ordinary income tax on your profit, at your bracket, after your deductions. There is no single percentage to quote here because it depends on your filing status, your other income, your standard or itemised deduction, and — for most freelancers — the Qualified Business Income deduction, which is 20% of qualified business income and was made permanent by the One Big Beautiful Bill Act enacted in July 2025. For 2026 it also gained a $400 minimum deduction for anyone with at least $1,000 of QBI from an active trade or business.

Then, if your state taxes income, that too, with its own rates and its own deadlines.

The math on a real number

Take a freelancer with $90,000 of net profit — revenue minus deductible business expenses — for the year.

So before a single dollar of income tax, $12,717 — a little over 14% of profit — is already spoken for. Income tax then applies to profit reduced by that $6,358, by the standard or itemised deduction, and by the QBI deduction.

This is why “I’ll put aside 15%” is the single most common freelance planning error. Fifteen percent covers self-employment tax and nothing else.

The reliable method: safe harbor

You could forecast your full-year income and tax, and pay 90% of it. Most people forecast badly, and a freelancer’s income in particular is not forecastable in March.

The safe harbor exists for exactly this. From the 2026 Form 1040-ES General Rule, you avoid the underpayment penalty if your withholding plus estimated payments is at least the smaller of:

• 90% of the tax shown on your 2026 return, or
• 100% of the tax shown on your 2025 return (which must cover 12 months).

And the part people miss: if your prior-year AGI was over $150,000 ($75,000 if married filing separately), that second figure becomes 110%, not 100%.

This is powerful because the prior-year number is already known. Take last year’s total tax off last year’s return, divide by four, pay that. Have a spectacular year and triple your income — you still cannot be penalized for underpayment, and you settle the difference at filing.

Worked through:

The catch, and it is a real one: the safe harbor protects you from the penalty, not from the bill. If you earn far more this year, you will owe the balance in April. Set money aside for the actual liability; use the safe harbor to set the minimum you must send in each quarter.

If you have no prior year — your first year freelancing — the safe harbor has nothing to anchor to, and you are forecasting. Estimate conservatively and pay on the high side; an overpayment comes back as a refund.

The 2026 dates

(2026 Form 1040-ES. None of the four shifted for a weekend or holiday this year.)

Two things about that table. First, despite the word “quarterly”, the gaps are not three months — look at April to June, and September to January. The periods behind them are not equal either, so a plan built on “pay a quarter every three months” drifts out of step with the actual deadlines. Second, you can skip the January 15 payment if you file your 2026 return and pay everything owed by February 1, 2027.

Payment goes on Form 1040-ES, “Estimated Tax for Individuals” — by voucher in the mail, or through the IRS’s own online payment options, which is faster and gives you a confirmation number worth keeping.

The practical system

Forecasting once a quarter is a discipline most people abandon by June. This is more robust:

1. Open a second bank account for tax only. A plain savings account is fine; an account you can transfer out of in one tap is a problem.
2. Pick a set-aside percentage and apply it the day money lands, not at month end. Take last year’s total tax divided by last year’s profit as your starting point, then round up. In the $21,000-on-$90,000 example that is 23.3%, so use 25%. If your state taxes income, add its rate on top. If you’re new and have no history, 30% is a defensible starting place that errs the right way.
3. Transfer on receipt. Client pays $4,000, move $1,000 immediately. The remaining $3,000 is genuinely yours, and that is the whole psychological point.
4. Pay the quarterly amount out of that account, never out of operating cash.
5. Recheck in July. Half the year is real by then. If profit is running far ahead of last year, raise the percentage for the second half rather than discovering it in April.
6. Never let the tax account fund a cash-flow gap. If the business needs that money to survive the month, the business has a pricing problem, not a timing problem — see how much should I charge as a freelancer.

Two 2026-specific things worth knowing

The 1099-K threshold reverted to the pre-2021 rule: over $20,000 and over 200 transactions. Far fewer forms will arrive. This changes nothing about what you owe — income is reportable whether or not a form shows up — but it does mean your own records are now the only complete account of what you earned. Which is the entire argument for keeping a set of books that actually tracks the right things.

The standard mileage rate changed mid-year. For 2026 it is 72.5 cents per mile for January 1 through June 30, and 76 cents per mile from July 1 onward (IRS standard mileage rates, updated July 2026). A mileage log that isn’t split by date will compute the wrong deduction for half the year.

One habit worth building at the point where you are tempted to skip a quarter entirely: pay something rather than nothing. A partial payment on time reduces whatever shortfall the IRS is measuring, and the exact way that shortfall is assessed is spelled out in the instructions for Form 2210 — worth ten minutes of reading before you decide a quarter is optional.