How to Save for Taxes When Self-Employed

The tax is not your money, so do not treat it like it is

A job withholds tax before you ever see your pay. On your own, the full payment hits your account, and it is easy to forget a chunk belongs to the government. Spend it and the bill still comes. The fix is to separate the tax the moment money arrives.

The set-aside habit

Move a fixed share of every payment, often a quarter to a third, into a separate account the day it lands. You never see it as spendable, so the tax bill becomes a transfer instead of a crisis. Out of sight is the whole trick.

Where does a quarter to a third come from? Start with the 15.3 percent self-employment tax, add your federal bracket, add your state. Our free after-tax rate calculator does this math for all 50 states and shows what to set aside from each job.