Question

How much of my freelance income should I put aside for freelance income tax?

Answer

To figure your estimated freelance income tax, you must estimate these items for the new year:

  • Adjusted gross income (AGI)
  • Taxable income
  • Income taxes
  • Self-employment taxes
  • Deductions
  • Credits

Use your prior-year return as a guide. Adjust the amounts in each category, including freelance income tax, for changes you expect in the coming year. Your income minus deductions and credits will be your taxable income for the year.

Based on your filing status and age, check the tax tables against your estimated taxable income for the year. This will determine your estimated tax liability.

Divide your estimated tax liability into four estimated payments to be made each quarter. This assumes you’ll receive the income evenly throughout the year. If your income changes during the year, you should recalculate each quarterly payment based on the new amounts.

Related Topics

Related Resources

Average Cost Basis – Mutual Funds

Learn more about the average cost basis method of selling shares and get tax answers at H&R Block.

I have a question about SSI taxable income. Is supplemental security income taxable?

Should you count supplemental security income as taxable income? Learn more from the tax experts at H&R Block.

Taxable Military Income

Learn more about taxable military pay and get tax answers at H&R Block.

Do I have to report Social Security disability income tax — SSDI Taxes?

Do you need to report your social security disability income on your tax return? Learn more from the tax experts at H&R Block.