Side Hustle Quarterly Tax Set-Aside Calculator
Side income has no withholding, so the IRS expects four estimated payments. This works through the 2026 Form 1040-ES self-employment tax worksheet, adds income tax at your bracket, and shows the safe harbor amount that avoids the underpayment penalty.
Results
How it works
Net profit = income - expenses. SE tax base = net x 92.35%. SE tax = base x 2.9% (Medicare) + the part of the base under $184,500 minus your W-2 wages x 12.4% (Social Security); none if the base is under $400. Income tax = (net - half of SE tax) x your bracket. Per quarter = yearly / 4. Safe harbor (Form 1040-ES General Rule) = 100% of your 2025 tax, or 110% if 2025 AGI was over $150,000, minus withholding, split into four. Paying the smaller of that or 90% of this year's tax avoids the penalty. Paycheck withholding is assumed to cover the tax on your wages. This treats your bracket as flat and leaves out the QBI deduction and credits, so it leans high.
Source
FAQ
When are 2026 estimated payments due?
April 15, June 15 and September 15, 2026, and January 15, 2027 (Form 1040-ES, 2026). You can skip the January payment if you file your 2026 return by February 1, 2027 and pay the balance with it.
What is the safe harbor?
If your payments and withholding cover 100% of the tax on your 2025 return (110% if your 2025 AGI was over $150,000, or $75,000 married filing separately), you avoid the underpayment penalty even if you owe more in April.
Do I have to pay quarterly?
Generally yes if you expect to owe at least $1,000 after withholding and refundable credits, and withholding will cover less than the safe harbor amount (Form 1040-ES, Who Must Make Estimated Tax Payments).
Why only 92.35% of profit?
The IRS lets you reduce net earnings by the employer half of the tax before applying the 15.3% rate: 100% - 7.65% = 92.35% (Form 1040-ES SE worksheet line 3 and Publication 505).
Can I raise my W-2 withholding instead?
Yes. Form 1040-ES notes that filing a new Form W-4 with your employer can cover the tax on side income without quarterly payments.
Related calculators
Estimates, not tax or financial advice. Check important numbers with a qualified professional.