Freelance income is lumpy, but the IRS payment schedule is not. Four dates a year: April 15, June 15, September 15 and January 15. If you earn money without an employer withholding tax, you are the withholding department, and most of us run that department with a guess.
I used to guess like this: take last quarter's number, add a cushion, and hope. It works until a big invoice lands in one month, or a slow quarter makes the cushion feel like overpaying. The problem is not discipline. The problem is that a flat guess ignores how uneven income really is.
Here is the calculation that replaced my guessing, in four steps.
Step one: annualize. Take your profit so far this year (income minus expenses) and scale it to a full year. After Q1 multiply by four. After Q2 (the IRS periods are Jan to Mar, Apr to May, Jun to Aug and Sep to Dec) you multiply by 2.4. After Q3 by 1.5. After Q4 you simply have the year.
Step two: estimate self-employment tax. About 92.35% of your net profit is taxed at 15.3% (12.4% Social Security up to a yearly cap, plus 2.9% Medicare). Half of that tax is deductible against your income tax.
Step three: estimate income tax. Net profit, minus half of the SE tax, minus the standard deduction and any other deductions, runs through the bracket table.
Step four: take the cumulative share. You owe about 25% of the year's estimate by the first deadline, 50% by the second, 75% by the third, and 100% by the fourth, minus whatever you have already paid. That difference is the payment.
The result I care about most is not the quarterly payment. It is one percentage: total estimated tax divided by annualized profit. With sample numbers for a single filer making roughly $47,000 in profit, it came to about 25.6% including a flat state estimate. That is the share of every client payment that goes straight into a separate Taxes savings account on the day it arrives. After that, quarterly deadlines become a transfer instead of a scramble.
One more idea worth knowing is safe harbor. The IRS generally does not charge an underpayment penalty if your payments reach roughly 90% of this year's tax or 100% of last year's total tax (110% for higher earners). If last year was a smaller year, paying the safe-harbor amount can mean smaller quarterly payments, with the balance due in April. Seeing both numbers side by side lets you choose on purpose.
I built all of this into a workbook so I stop redoing the arithmetic by hand: an income log, an expense log, a Quarterly Calc tab where every formula is visible, a dashboard with the set-aside percentage and due-date status, and a 7-page setup guide. It works in Excel and Google Sheets. It is an estimating tool, not tax advice, and the 2026 figures should be confirmed against IRS and SSA publications for your year.
You can get the workbook here: https://logi2.gumroad.com/l/uagewo (also on Etsy: https://www.etsy.com/listing/4607554472).
If you want more practical, no-hype money systems for solo workers, I write a weekly note at aifounderweekly.substack.com. Subscribing is free.
Originally published on Medium.
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