Freelancer Quarterly Tax Calculator
Calculate quarterly estimated tax payments for freelancers and self-employed. Includes self-employment tax, federal and state taxes.
Tax Settings (2024)
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About This Calculator
How much should I set aside for taxes as a freelancer? The short answer: 25-30% of every dollar you earn. But the real answer depends on your income, deductions, and tax bracket. The Freelancer Tax Calculator gives you precise numbers: your federal income tax, self-employment tax (that brutal 15.3% many freelancers forget), and quarterly estimated payments to avoid IRS penalties.
Here's what catches new freelancers off guard: When you had a W-2 job, your employer paid half of your Social Security and Medicare taxes - you never saw that money. As a freelancer, you pay BOTH halves - a full 15.3% on top of your income tax. On $100,000 of freelance income, that's an extra $7,650 compared to being employed.
The 2026 tax landscape for freelancers:
- Self-employment tax: 15.3% (12.4% Social Security on first $184,500 + 2.9% Medicare on all earnings)
- Additional Medicare tax: 0.9% on earnings over $200,000 (single) or $250,000 (married)
- QBI deduction: Up to 20% off your qualified business income
- Quarterly payment deadlines: April 15, June 16, September 15, January 15
The gig economy reality: Over 64 million Americans now freelance - nearly 38% of the workforce. Yet 40% of new freelancers are shocked by their first tax bill because no one warned them about self-employment tax. This calculator ensures you're never surprised.
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How to Use the Freelancer Quarterly Tax Calculator
- 1**Enter your gross freelance income**: Include all 1099 income, cash payments, barter income, and any self-employment earnings. This is your total before expenses.
- 2**Subtract business expenses**: Deduct home office, equipment, software subscriptions, professional development, vehicle mileage, health insurance, and other legitimate business costs.
- 3**Select your filing status**: Single, Married Filing Jointly, Married Filing Separately, or Head of Household - this affects your tax brackets and standard deduction.
- 4**Add other income sources (if any)**: W-2 wages, investment income, or other earnings affect your total tax bracket and quarterly payment calculations.
- 5**Review your self-employment tax**: See the 15.3% SE tax calculated on 92.35% of your net earnings - this is what surprises most freelancers.
- 6**Check your federal income tax**: Based on your taxable income after the standard deduction and any other deductions/credits.
- 7**Note your quarterly payment amounts**: Divide your total annual tax by 4. Pay these by April 15, June 16, September 15, and January 15 to avoid penalties.
- 8**Set up automatic transfers**: Move 25-30% of each payment you receive into a separate tax savings account immediately - this is the #1 freelancer tax survival strategy.
Formula
Self-Employment Tax = (Net SE Income × 92.35%) × 15.3%
Quarterly Payment = (Estimated Annual Tax) / 4The self-employment tax is calculated on 92.35% of your net self-employment income (this adjustment accounts for the employer-equivalent portion). The 15.3% rate covers Social Security (12.4%) and Medicare (2.9%). Quarterly payments divide your total estimated tax liability into four equal installments due throughout the year.
Jar Insight: The Self-Employment Tax Surprise
The Hidden Tax That Costs Freelancers 15.3% More
When you work as an employee, you see 7.65% deducted from your paycheck for Social Security (6.2%) and Medicare (1.45%). What you do not see is your employer paying another 7.65% on your behalf.
As a freelancer, you pay BOTH halves—a full 15.3% on top of your income tax. This is the self-employment tax, and it shocks first-time freelancers who expect their tax bill to match their W-2 days.
The Math:
- Employee earning $100,000: Pays 7.65% ($7,650) in FICA
- Freelancer earning $100,000: Pays 15.3% ($15,300) in SE tax
That is an extra $7,650 per year—money you must plan for.
Historical Context: Self-employment tax dates to 1951 when Congress extended Social Security to the self-employed. The rate has climbed from 3% to today's 15.3%. The additional 0.9% Medicare surtax (since 2013) kicks in at $200,000 for single filers.
The Gig Economy Reality: In 2024, over 64 million Americans performed freelance work—nearly 38% of the workforce. Yet surveys show 40% of new freelancers are surprised by their first tax bill. Do not be one of them.
Quarterly Estimated Tax Due Dates 2025-2026
2025 Quarterly Payment Schedule:
| Quarter | Income Period | Due Date |
|---|---|---|
| Q1 | Jan 1 - Mar 31 | April 15, 2025 |
| Q2 | Apr 1 - May 31 | June 16, 2025 |
| Q3 | Jun 1 - Aug 31 | September 15, 2025 |
| Q4 | Sep 1 - Dec 31 | January 15, 2026 |
2026 Quarterly Payment Schedule:
| Quarter | Income Period | Due Date |
|---|---|---|
| Q1 | Jan 1 - Mar 31 | April 15, 2026 |
| Q2 | Apr 1 - May 31 | June 16, 2026 |
| Q3 | Jun 1 - Aug 31 | September 15, 2026 |
| Q4 | Sep 1 - Dec 31 | January 15, 2027 |
Why Quarterly Payments Matter: The IRS expects taxes paid throughout the year, not just at filing. Miss payments or pay too little, and you face:
- Underpayment penalty (currently ~8% annual rate)
- Interest on unpaid amounts
- Cash flow crunch at tax time
Safe Harbor Rules (Avoid Penalties): You will NOT owe penalties if you pay the lesser of:
- 90% of current year tax owed, OR
- 100% of last year's total tax (110% if AGI over $150,000)
Pro Strategy: If your income varies wildly, use the annualized income installment method (Form 2210 Schedule AI) to pay based on when you actually earned the money.
Deductions Freelancers Forget
The Top 10 Overlooked Freelancer Deductions:
1. Home Office Deduction
- Simplified method: $5 per sq ft (up to 300 sq ft = $1,500)
- Regular method: Actual expenses proportional to office space
- Requirements: Regular and exclusive business use
2. Internet and Phone
- Deduct business-use percentage
- Keep logs if IRS questions (70% business use is common)
3. Health Insurance Premiums
- 100% deductible for self-employed (above-the-line deduction)
- Includes spouse and dependents
- This alone can save $3,000-$10,000+ in taxes
4. Equipment and Software
- Computers, monitors, printers
- Software subscriptions (Adobe, Microsoft 365, etc.)
- Section 179 allows full deduction in purchase year
5. Professional Development
- Courses, certifications, conferences
- Books and subscriptions in your field
- Must maintain or improve skills for current work
6. Retirement Contributions
- SEP-IRA: Up to 25% of net self-employment income (max $70,000 in 2025, $72,500 in 2026)
- Solo 401(k): Up to $23,500 employee + 25% employer contributions
- These reduce taxable income dollar-for-dollar
7. Vehicle Expenses
- 2025-2026 standard mileage rate: 70 cents per mile
- Or actual expenses (gas, insurance, repairs) proportional to business use
8. Bank Fees and Interest
- Business account fees
- Interest on business loans/credit cards
- PayPal, Stripe, payment processing fees
9. Advertising and Marketing
- Website hosting and domains
- Social media ads
- Business cards, promotional materials
10. Professional Services
- Accountant/CPA fees
- Legal consultation
- Business coaching
Self-Employment Tax Calculation 2026
Step-by-Step SE Tax Calculation:
Step 1: Calculate Net Self-Employment Income Gross freelance income - Business expenses = Net SE income
Step 2: Calculate Taxable SE Income Net SE income x 92.35% = Taxable SE income (This 7.65% reduction accounts for the "employer half" deduction)
Step 3: Apply SE Tax Rates
- Social Security: 12.4% on first $184,500 (2026 wage base)
- Medicare: 2.9% on ALL SE income
- Additional Medicare: 0.9% on income over $200,000 (single) / $250,000 (married)
Example: $100,000 Net Freelance Income
- Taxable SE income: $100,000 x 92.35% = $92,350
- Social Security: $92,350 x 12.4% = $11,451
- Medicare: $92,350 x 2.9% = $2,678
- Total SE Tax: $14,129
Step 4: Deduct Half of SE Tax You can deduct 50% of SE tax from your adjusted gross income. $14,129 / 2 = $7,065 deduction
This reduces your income tax (but not your SE tax).
High Earner Example: $250,000 Net Freelance Income
- Taxable SE income: $250,000 x 92.35% = $230,875
- Social Security: $184,500 x 12.4% = $22,878 (capped at wage base)
- Medicare: $230,875 x 2.9% = $6,695
- Additional Medicare: ($230,875 - $200,000) x 0.9% = $278
- Total SE Tax: $29,851
Freelancer Tax Planning Strategies
Maximize Deductions, Minimize Taxes:
Entity Structure Considerations:
- Sole proprietor: Simplest, all income on Schedule C
- Single-member LLC: Same taxation, added liability protection
- S-Corp election: Can reduce SE tax if salary + distribution strategy makes sense (typically beneficial above $80K-$100K net income)
Timing Strategies:
- Defer income: Invoice in December, receive payment in January
- Accelerate expenses: Buy equipment before year-end
- Bunch deductions: Alternate years for maximum itemized deductions
Retirement Savings = Tax Savings:
| Account Type | 2026 Max | Tax Benefit |
|---|---|---|
| SEP-IRA | $72,500 | Immediate deduction |
| Solo 401(k) | $72,500 | Immediate deduction |
| Traditional IRA | $7,500 | Immediate deduction |
| Roth IRA | $7,500 | Tax-free growth |
Example Tax Savings: $50,000 SEP-IRA contribution at 24% tax bracket = $12,000 tax savings
Estimated Tax Strategy:
- Year 1 freelancing: Pay 100% of prior year tax (safe harbor)
- Subsequent years: Pay quarterly based on projected income
- High variance income: Use annualized installment method
The QBI Deduction: Free 20% Off Your Taxes
What Is the QBI Deduction?
The Qualified Business Income (QBI) deduction lets freelancers deduct up to 20% of their qualified business income from their taxable income. This is separate from business expense deductions and applies to pass-through income (sole proprietorships, LLCs, S-Corps).
How It Works:
| Net Business Income | QBI Deduction | Tax Savings (24% bracket) |
|---|---|---|
| $50,000 | $10,000 | $2,400 |
| $100,000 | $20,000 | $4,800 |
| $150,000 | $30,000 | $7,200 |
| $200,000 | $40,000 | $9,600 |
Income Limits (2026):
| Filing Status | Full Deduction | Phase-Out | No Deduction |
|---|---|---|---|
| Single | Under $191,950 | $191,950 - $241,950 | Over $241,950 |
| Married Filing Jointly | Under $383,900 | $383,900 - $483,900 | Over $483,900 |
Important Restrictions:
- Specified Service Trades or Businesses (SSTBs): Health, law, accounting, consulting, financial services, and performing arts face phase-out limits earlier
- W-2 Wage Limitation: At higher incomes, deduction may be limited to 50% of W-2 wages paid or 25% of W-2 wages plus 2.5% of qualified property
- Must have taxable income: QBI deduction can't exceed your taxable income
Example: Freelance consultant earning $120,000 net after expenses:
- QBI Deduction: $120,000 x 20% = $24,000
- Tax savings (24% bracket): $5,760
- This is in ADDITION to deducting business expenses
S-Corp Election: When It Saves You Thousands
The S-Corp Tax Savings Strategy:
At higher income levels, electing S-Corp status can significantly reduce self-employment tax. Here's how it works:
Sole Proprietor vs S-Corp Comparison ($150,000 net income):
| Tax Type | Sole Proprietor | S-Corp ($80K salary) |
|---|---|---|
| SE Tax | $21,194 | $0 (paid as payroll tax) |
| Payroll Tax (employer) | $0 | $6,120 |
| Payroll Tax (employee) | $0 | $6,120 |
| Total FICA/SE | $21,194 | $12,240 |
| Annual Savings | - | $8,954 |
How It Works:
- You become an employee of your own S-Corp
- Pay yourself a "reasonable salary" (subject to payroll tax)
- Take remaining profits as distributions (NO self-employment tax)
- Distributions only pay income tax, not the 15.3% SE tax
When S-Corp Makes Sense:
| Net Income | S-Corp Benefit | Recommendation |
|---|---|---|
| Under $60,000 | Minimal | Stay sole proprietor |
| $60,000 - $80,000 | $1,000 - $3,000 | Consider if income stable |
| $80,000 - $150,000 | $3,000 - $10,000 | Usually beneficial |
| $150,000+ | $10,000+ | Almost always beneficial |
Important Considerations:
- Reasonable salary required: IRS requires you pay yourself a reasonable salary for your work
- Additional costs: Payroll processing ($20-50/month), annual tax return (~$500-1,500)
- Quarterly payroll taxes: More paperwork and deadlines
- State requirements: Some states charge S-Corp fees or don't recognize the election
- Break-even point: Generally need $80K+ net income for savings to exceed costs
Common Freelancer Tax Mistakes (And How to Avoid Them)
Mistake #1: Not Setting Money Aside
| Approach | Result |
|---|---|
| ❌ Spend everything, figure taxes later | $15,000+ surprise bill in April |
| ✅ Set aside 25-30% of each payment | Never surprised, always prepared |
Mistake #2: Missing Quarterly Payments
The IRS charges ~8% annual interest on underpayments. On $10,000 owed:
- Miss Q1: $200 penalty
- Miss Q1-Q2: $400 penalty
- Miss all year: $800+ penalty
Mistake #3: Not Tracking Expenses
| Freelancer A | Freelancer B |
|---|---|
| Gross income: $100,000 | Gross income: $100,000 |
| Tracked expenses: $5,000 | Tracked expenses: $25,000 |
| Taxable income: $95,000 | Taxable income: $75,000 |
| Tax bill: ~$28,000 | Tax bill: ~$20,000 |
| Difference: $8,000 | Saved by tracking |
Mistake #4: Missing the Home Office Deduction
If you work from home, you're leaving money on the table:
- Simplified method: $5/sq ft up to 300 sq ft = $1,500 deduction
- Regular method: Can be significantly higher
Mistake #5: Not Using Retirement Accounts
| Without SEP-IRA | With SEP-IRA |
|---|---|
| Net income: $100,000 | Net income: $100,000 |
| SEP contribution: $0 | SEP contribution: $25,000 |
| Taxable income: $100,000 | Taxable income: $75,000 |
| Tax savings: $0 | Tax savings: $6,000 (24% bracket) |
Mistake #6: Mixing Personal and Business
- Use separate bank accounts
- Use separate credit cards
- Keep meticulous records
- Document business purpose of expenses
Pro Tips
- 💡Set aside 25-30% of every payment into a separate tax savings account immediately upon receipt - this is the #1 survival strategy.
- 💡Track all expenses throughout the year using apps like QuickBooks Self-Employed, Wave, or a simple spreadsheet.
- 💡Don't forget the home office deduction - even the simplified method ($5/sq ft up to $1,500) saves you hundreds with zero paperwork.
- 💡Max out retirement contributions (SEP-IRA or Solo 401(k)) to reduce taxable income by up to $72,500 in 2026.
- 💡Keep receipts and documentation for at least 7 years in case of IRS audit - scan everything to the cloud.
- 💡Consider quarterly bookkeeping sessions to stay organized and avoid year-end scrambles.
- 💡Review your quarterly estimates each quarter - adjust if income is higher or lower than expected to avoid penalties.
- 💡If your freelance income exceeds $80,000-$100,000, consult a CPA about S-Corp election to potentially save $5,000-$15,000 annually.
- 💡Deduct health insurance premiums - this above-the-line deduction is often worth $3,000-$10,000 in tax savings.
- 💡Mark quarterly due dates (Apr 15, Jun 16, Sep 15, Jan 15) in your calendar with reminders one week prior.
- 💡Claim the QBI deduction (20% off qualified income) - it's separate from your expense deductions and saves thousands.
- 💡Use separate bank accounts and credit cards for business - mixing personal and business is an audit red flag and makes tracking impossible.
Frequently Asked Questions
The self-employment tax rate is 15.3%, consisting of 12.4% for Social Security (on income up to $184,500 in 2026) and 2.9% for Medicare (on all earnings). If your income exceeds $200,000 (single) or $250,000 (married filing jointly), you also pay an additional 0.9% Medicare surtax on the excess.
