Side hustle tax calculator: how much to set aside in 2026
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Rates checked against IRS sources on Oct 8, 2026.
Most side-hustle tax advice stops at “save 25–30%.” That number is wrong for a lot of people. Your W-2 salary decides your bracket, and it can also use up the Social Security wage base.
This calculator follows the IRS's own 2026 Form 1040-ES worksheet line by line. Every rate and threshold links to the IRS page it came from. It tells you what share of each payment to move into a tax account, and what to send on each due date.
Your 2026 set-aside
Federal only. Results update as you type. Estimates only; not tax advice.
Set aside
19.6%
of each side-income payment (26.2% of profit)
2026 total to cover
$3,923
federal tax minus withholding
Each quarter
$981
Over $1,000 due: estimates likely required
| Net side profit | $15,000 |
|---|---|
| Self-employment tax (15.3% on 92.35% of profit) | $2,119 |
| Additional Medicare Tax (0.9%) | $0 |
| Deduction for half of SE tax | −$1,060 |
| Standard deduction | −$16,100 |
| QBI deduction (20%) | −$2,788 |
| Taxable income | $55,052 |
| Federal income tax (all income) | $6,823 |
| Extra income tax from the side profit | $1,803 |
| Total federal tax caused by the side profit | $3,923 |
2026 quarterly due dates
| Payment | Income earned | Due | Amount |
|---|---|---|---|
| 1st payment | Jan 1 – Mar 31 | Apr 15, 2026 | $981 |
| 2nd payment | Apr 1 – May 31 | Jun 15, 2026 | $981 |
| 3rd payment | Jun 1 – Aug 31 | Sep 15, 2026 | $981 |
| 4th payment | Sep 1 – Dec 31 | Jan 15, 2027 | $981 |
Tie-breaker for your numbers
Your combined federal rate on the next dollar of side profit is 30.5%. 1-800Accountant's Tax Advisory plan ($2,508 a year, and it does not file your return) beats DIY only if it finds more than $8,227 of deductions you would otherwise miss. If you can't name that much, stick with software.
Not tax or legal advice. Estimates only, built from published IRS figures and vendor prices; confirm with the IRS instructions or a tax professional before you pay.
Want someone else to own the quarterly math?
1-800Accountant's Business Complete plan calculates and tracks quarterly estimates for you. It is billed annually, so check the numbers in the tie-breaker below before you book a consult.
See 1-800Accountant plans & pricingWho this is for, and who it isn't
Use it if
- You have a W-2 job and 1099 or platform income on the side.
- You file as a sole proprietor or single-member LLC (Schedule C).
- You take the standard deduction.
Not a good fit if
- You run an S-corp or partnership. Payroll and K-1s change the math completely.
- You itemize, have big capital gains, or claim credits. We leave all of those out.
- You need your state number. This is federal only; add your state's rate yourself.
How the math works
Two taxes hit side profit: self-employment tax and income tax. Here is the worked example, step by step.
- Net profit: $20,000 income − $5,000 expenses = $15,000.
- SE tax base: $15,000 × 92.35% = $13,853. Social Security (12.4%) applies only up to the $184,500 wage base, minus your W-2 wages. Medicare (2.9%) has no cap. SE tax = $2,119.
- Half of SE tax ($1,060) comes off your income before income tax. So does the $16,100 standard deduction.
- The qualified business income deduction takes 20% of profit (after the SE deduction) off taxable income: $2,788. Above the 2026 threshold we leave it out, which overstates tax slightly.
- Income tax on $55,052 of taxable income is $6,823. On the salary alone it would be $5,020. The side profit adds $1,803, taxed at the 22.0% bracket.
- Total: $2,119 + $1,803 = $3,923, or 19.6% of each payment you receive. Four payments of $981.
The safe harbors that matter more than precision
You avoid the underpayment penalty by paying the smaller of 90% of this year's tax or 100% of last year's.
If last year's AGI was over $150,000 ($75,000 married filing separately), the prior-year figure is 110%. If you expect to owe less than $1,000 after withholding, you generally don't need estimates at all.
For a first-year side hustle, last year's tax is often the easier target. It is a known number, and it ignores how much the side income grows.
Tie-breaker: when a pro beats DIY, in numbers
In the worked example, each extra dollar of side profit costs 30.5% in federal tax. 1-800Accountant's Tax Advisory plan costs $2,508 a year and does not file your return. It only pays for itself if it finds more than $8,227 of deductions you would have missed. If you can't point to that much, stick with software.
Full plan-by-plan numbers: what $2,508 up front buys.
Questions people ask
How much of my side hustle income should I set aside for taxes?
It depends on your bracket and your W-2 income. In our worked example (single, $60,000 salary, $15,000 side profit) the federal share is 26.2% of profit. Add your state's rate on top.
Do I have to pay quarterly estimated taxes on side income?
Usually, if you expect to owe at least $1,000 after withholding and your withholding covers less than 90% of this year's tax or 100% of last year's (110% if last year's AGI topped $150,000).
Can I raise my W-4 withholding instead of paying quarterly?
Yes. Form 1040-ES says withholding from wages can cover estimated tax. Put the calculator's annual total into extra withholding and set the four quarterly payments to zero.
Why is self-employment tax charged on only 92.35% of profit?
The IRS lets you reduce net profit by the employer-equivalent share of the tax first. The 2026 Form 1040-ES worksheet applies it as profit × 92.35% before the 15.3%.
What happens if I miss a quarterly payment?
Form 1040-ES warns you may be charged a penalty if payments are late or too small. Catch up by the next due date or sooner. Form 2210 is how the IRS figures it.
Sources
- IRS Form 1040-ES (2026), Estimated Tax for Individuals (as of 2026-10-08): Self-employment tax worksheet (92.35%, 2.9%, 12.4%, $184,500 Social Security maximum), 2026 tax rate schedules, the four 2026 due dates, the $1,000 rule and the 90% / 100% / 110% safe harbors.
- IRS Rev. Proc. 2025-32 (2026 inflation adjustments) (as of 2026-10-08): 2026 bracket thresholds for all four filing statuses (section 4.01) and the 2026 qualified business income threshold amounts (section 4.26).
- IRS newsroom: tax inflation adjustments for tax year 2026 (as of 2026-10-08): 2026 standard deductions: $16,100 single or separate, $32,200 joint, $24,150 head of household.
- IRS: Self-employment tax (Social Security and Medicare taxes) (as of 2026-10-08): 15.3% rate (12.4% Social Security + 2.9% Medicare) and the $400 net-earnings filing threshold.
- IRS Topic no. 554, Self-employment tax (as of 2026-10-08): 92.35% of net earnings is subject to SE tax, the deduction for half of SE tax, and the 0.9% Additional Medicare Tax thresholds ($250,000 joint, $125,000 separate, $200,000 all others).
- IRS: Qualified business income deduction (as of 2026-10-08): Deduction of up to 20% of QBI, capped at 20% of taxable income.
Not tax or legal advice. Estimates only, built from published IRS figures and vendor prices; confirm with the IRS instructions or a tax professional before you pay.
Bottom line
Move the set-aside percentage into a separate account every time you get paid. Send the quarterly amount on each due date. Pay for help only when the tie-breaker says the help earns its fee.
Compare the paid option
Read the plan list and billing terms before you book anything. Every published tier is billed annually.
See 1-800Accountant plans & pricingMore: our 1-800Accountant review and when paying for tax software beats filing free.