Freelancer Taxes: A Simple Set-Aside Method and the 2026 Quarterly Due Dates

Short on time? The Freelancer Finance Tracker ($15) is the finished, tested version of what this tutorial builds.

When you freelance, nobody withholds tax from your pay. The fix most freelancers settle on is boring and effective: every time you get paid, move a fixed percentage of profit to a separate savings account, then pay estimated tax from that account each quarter.

Step 1: Pick a set-aside percentage

Your real tax depends on income tax brackets, self-employment tax, deductions, state tax and your household. So there is no universal number.

Many freelancers start with 25–30% of profit and adjust after their first tax return. A tax professional can give you a number for your situation in one short meeting, and it's worth doing once.

"Profit" means money received minus business expenses. It is not revenue.

Step 2: Know the estimated-tax periods

The IRS periods are not calendar quarters:

Period 2 is only two months and period 4 is four months. When a due date lands on a weekend or holiday it moves to the next business day, so always confirm on irs.gov (Form 1040-ES).

Step 3: A worked example

Say that in period 3 (Jun–Aug) you were paid $14,000 and had $2,200 of business expenses.

• Profit = $14,000 − $2,200 = $11,800
• Set-aside at 25% = $2,950

If you moved 25% of profit each time a payment arrived, the $2,950 is already sitting in the tax account on September 15.

Step 4: Track it in a spreadsheet

For each period, sum payments and expenses between the start and end dates:

E5 (profit):     =SUMIFS(Payments!$C:$C, Payments!$A:$A, ">="&B5, Payments!$A:$A, "<="&C5)
                  - SUMIFS(Expenses!$G:$G, Expenses!$A:$A, ">="&B5, Expenses!$A:$A, "<="&C5)
F5 (set-aside):  =MAX(0, E5) * $B$2

Here Payments has the date in column A and the amount in C. Expenses has the date in A and the deductible amount in G. $B$2 holds your set-aside percentage.

B5 and C5 are the period's start and end dates. MAX(0, …) stops a loss-making period from producing a negative set-aside.

Add columns for estimated payment made and date paid so you can see at a glance whether each period is covered.

Common mistakes

• Using revenue instead of profit. You over-save, which is safe but ties up cash.
• Forgetting period 2 is short. June 15 arrives only two months after April 15.
• Spending the tax account. Keep it at a different bank if you're tempted.

Done-for-you version

The Freelancer Finance Tracker includes:

• a Quarterly Set-Aside tab with these periods and your own percentage
• invoices with overdue tracking, AR aging by client, expenses by Schedule C line
• a dashboard

Not tax advice. The spreadsheet applies your own percentage; it does not calculate your tax.

Written with AI assistance. Every formula, command and number on this page was tested before publishing (see each section). Product links go to our store.