Never fear tax season again.
New freelancers and gig workers often face a common hurdle: figuring out how much to save from each invoice to pay taxes. SaltMine simplifies this process. Discover your 'Safe to Spend' amount instantly, ensuring you are prepared when the tax bill arrives. Don't let your self-employment journey be derailed by unexpected liabilities.
Calculate Your Tax Buffer
Enter your invoice amount and estimate your annual tax bracket to find out how much to reserve.
Why buffering is critical for side-hustlers
The 1099 Trap
Unlike W-2 employees whose employers withhold taxes automatically, 1099 contractors and sole proprietors receive their full gross pay. However, they are entirely responsible for paying both income tax and self-employment tax (Medicare and Social Security) directly to the IRS. Falling behind can lead to severe penalties and cash flow crises.
Estimating Your Rate
Your effective rate depends on total annual income. A safe rule of thumb for many new freelancers is to set aside 25% to 30% of gross income. This covers the ~15.3% self-employment tax plus federal and state income brackets. Always consult a tax professional for precise planning tailored to your specific jurisdiction.
The Separate Account Rule
Calculating the reserve is only step one. Step two is moving that money immediately into a dedicated, separate savings account labeled 'Taxes'. Out of sight, out of mind. When quarterly estimated tax payments are due, the funds are already waiting, eliminating stress and financial scrambling.