How Much Should You Set Aside for 1099 Taxes?

The 25–30% rule of thumb

As a working baseline, set aside about 25–30% of your net self-employment income (gross earnings minus deductible business expenses) for taxes. That percentage covers the 15.3% self-employment tax — 12.4% for Social Security plus 2.9% for Medicare — which the IRS levies on net earnings, plus federal income tax on top. Workers in higher income-tax brackets, or in states that tax income, should lean toward the upper end or beyond; very low earners may owe less.

The figure that matters is net income, not gross. Because you can deduct business mileage at the IRS standard rate (70 cents per mile for 2025 business use) and other legitimate expenses, your taxable number is often far smaller than your gross deposits. UnifyOne by 1Commerce tracks net income after those deductions in real time and forecasts what to set aside continuously.

Why a percentage beats a fixed dollar amount

Gig income is variable, so a fixed monthly transfer either over- or under-saves. A percentage of each payout scales with what you actually earn:

• ✦Move ~25–30% of every net payout into a separate tax-savings account.
• ✦Count the 15.3% self-employment tax first — it applies even in low brackets.
• ✦Add your federal income-tax bracket; add state income tax if applicable.
• ✦Deduct mileage and expenses so you are taxed on net, not gross.
• ✦True up quarterly so you neither overpay nor face an underpayment penalty.

Estimate it for free, then automate it

UnifyOne's free 1099 Tax Set-Aside Calculator at /tools/tax-set-aside turns your income into a recommended set-aside amount in seconds, and the Self-Employment Tax Calculator at /tools/se-tax-calculator breaks out the 15.3% component. For an authoritative reference, see the IRS Self-Employment Tax guidance. Inside the full UnifyOne app, the set-aside updates automatically as earnings land, so the money is waiting when the IRS is.

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