Quarterly Taxes for Freelancers — Step-by-Step Guide
If you freelance, do gig work, or run a side business, you're responsible for paying your own taxes throughout the year — no employer is withholding them for you. That means quarterly estimated tax payments, self-employment tax on top of income tax, and a set of deductions that can significantly reduce what you owe. Here's the freelancer's roadmap.
Calculate your quarterly payment amount with the Quarterly Tax Calculator.
What Freelancers Owe That Employees Don't
As a freelancer, you pay two taxes that W-2 employees have split with their employer:
| Tax Component | Employee Pays | Freelancer Pays |
|---|---|---|
| Social Security (6.2%) | 6.2% | 12.4% (both halves) |
| Medicare (1.45%) | 1.45% | 2.9% (both halves) |
| Total FICA | 7.65% | 15.3% |
| Additional Medicare (income > $200K) | 0.9% | 0.9% |
This 15.3% self-employment tax is on top of your federal and state income taxes. On $80,000 of freelance income, that's roughly $11,300 in SE tax alone — before income tax.
The silver lining: you deduct half of the SE tax ($5,650 in this example) from your adjusted gross income, which reduces your income tax.
Freelancer-Specific Deductions
These deductions reduce both your income tax and your self-employment tax base:
| Deduction | Typical Value | Requirements |
|---|---|---|
| Home office | $1,500–$5,000/yr | Dedicated space used regularly and exclusively for work |
| Vehicle mileage | $0.70/mile (2026) | Business use portion only; keep a mileage log |
| Health insurance premiums | $3,000–$12,000/yr | Self-employed health insurance deduction (above the line) |
| Internet/phone | 25–50% of cost | Business use percentage |
| Software and subscriptions | $500–$3,000/yr | Tools used for your work |
| Professional development | $500–$2,000/yr | Courses, conferences, books |
| Retirement contributions | Up to $69,000 (SEP IRA) | Reduces taxable income significantly |
| Half of SE tax | ~$5,500–$7,000 | Automatic deduction from AGI |
A Full Example: Freelance Income of $80,000
| Line | Amount |
|---|---|
| Gross freelance income | $80,000 |
| Minus: Business deductions | -$12,000 |
| Net self-employment income | $68,000 |
| SE tax (15.3% on 92.35% of $68K) | $9,606 |
| Deductible half of SE tax | $4,803 |
| AGI | $63,197 |
| Minus: Standard deduction | -$15,700 |
| Taxable income | $47,497 |
| Federal income tax | $5,510 |
| Total federal tax (income + SE) | $15,116 |
| Quarterly payment | $3,779 |
Setting Up Your System
The biggest challenge for freelancers isn't the math — it's the discipline of setting money aside before spending it.
The simplest system:
- Open a separate savings account labeled "Taxes"
- Every time you receive payment, transfer 25–30% to the tax account
- On the four quarterly deadlines, pay from this account via IRS Direct Pay
| Your Tax Bracket (approximate) | Set-Aside Percentage |
|---|---|
| Income under $50,000 | 20–25% |
| $50,000–$100,000 | 25–30% |
| $100,000–$200,000 | 30–35% |
| Over $200,000 | 35–40% |
These percentages include both income tax and self-employment tax. Adjust based on your deductions and state tax rate.
Most Common Freelancer Tax Mistakes
| Mistake | Cost |
|---|---|
| Not saving for taxes throughout the year | Cash crunch at payment time; late payment penalties |
| Forgetting self-employment tax | Underestimating total tax by 15% |
| Missing deductible expenses | Paying more tax than necessary |
| Not keeping receipts | Can't substantiate deductions if audited |
| Mixing personal and business expenses | Makes tracking and deductions harder |
For the four payment deadlines, see When Are Quarterly Taxes Due? 2026 Deadlines. For avoiding penalties, read Estimated Tax Penalty — How to Avoid It. And for the easiest penalty-avoidance strategy, check Safe Harbor Rule.
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