Freelance Tax Estimator

Stop stressing about tax season. Estimate your quarterly payments and find out exactly what percentage to save from every invoice.

Total money collected from clients before expenses.

$

Software, home office deduction, marketing, etc.

$

Typical US Freelance Effective Rates:

  • • $0 – $50k Profit: 20% – 25%
  • • $50k – $100k Profit: 25% – 30%
  • • $100k+ Profit: 30% – 35%

Estimated Total Taxes

$ 17,000
Quarterly Payment $4,250

Your Action Plan

Set aside 21% from every invoice you send to cover your taxes.

Disclaimer: This tool provides rough estimates for educational purposes only. It does not account for state taxes, complex deductions, or specific tax brackets. Always consult a certified CPA before filing.

How Freelance Taxes Work in the United States

Understanding self-employment tax, quarterly payments, penalties, deductions, and business structure decisions.

How Self-Employment Tax Works (15.3%)

When you work as a freelancer, you are both the employee and the employer. Traditional employees split Social Security and Medicare taxes with their employer. Freelancers must pay both portions.

Self-Employment Tax Breakdown:

  • • 12.4% Social Security
  • • 2.9% Medicare

This 15.3% tax applies to your net business profit, not total revenue.

Formula:

Revenue – Business Expenses = Net Profit

What Is Quarterly Estimated Tax?

The IRS requires freelancers to pay taxes throughout the year. Since no one withholds taxes from your invoices, you must send payments every quarter.

Quarterly Deadlines

  • • April 15
  • • June 15
  • • September 15
  • • January 15

Who Must Pay?

If you expect to owe $1,000 or more in taxes for the year, quarterly payments are generally required.

What Happens If You Don’t Pay?

Underpayment Penalties

The IRS may charge penalties and interest if you fail to pay enough during the year — even if you pay everything at tax time.

Cash Flow Shock

Waiting until April can lead to a surprise tax bill that drains savings or forces payment plans.

Common Tax Mistakes Freelancers Make

Not Tracking Expenses

Missing deductions increases taxable profit unnecessarily.

Mixing Finances

Using one account for everything makes bookkeeping chaotic.

Forgetting SE Tax

Many only calculate income tax and forget the 15.3%.

Not Saving Per Invoice

Successful freelancers automatically move 25–35% into a tax account.

How to Reduce Taxable Income Legally

You only pay taxes on profit. Lower profit legally through legitimate business deductions.

Software & Tools

Design tools, hosting, accounting platforms, subscriptions.

Home Office

Portion of rent, utilities, internet used for business.

Equipment

Laptops, monitors, cameras, furniture.

Professional Services

CPA, legal advice, bookkeeping services.

S-Corp vs Sole Proprietor (Basics)

Sole Proprietor

  • • Simple setup
  • • No payroll
  • • Full 15.3% SE tax on profit

S-Corp

  • • Pay yourself salary
  • • Remaining profit as distribution
  • • Potential SE tax savings at higher profit