Question 1

How much should I set aside for taxes as a freelancer or gig worker?

Accepted Answer

Most independent workers should set aside 25 to 30 percent of their net earnings for federal income tax and self-employment tax combined. This side-hustle tax estimator lets you choose a low, medium, or high effective rate and applies it after an eligible mileage deduction. Your actual rate depends on total annual income, filing status, state taxes, and available deductions, so treat this as a planning starting point.

Question 2

How do I calculate self-employment tax for gig work in 2026?

Accepted Answer

Start with gross earnings for the period, subtract eligible business expenses such as the IRS standard mileage deduction, then multiply net income by your estimated effective tax rate. Self-employment tax covers Social Security and Medicare contributions that a traditional employer would split with you. This calculator uses the current 2026 IRS business mileage rate and three planning rate brackets to give you a quick reserve estimate.

Question 3

What is the 2026 IRS mileage rate for business use?

Accepted Answer

The 2026 IRS business mileage rate is 76 cents per mile for the period from July 1 through December 31, 2026, and 72.5 cents per mile for January through June 2026. These rates apply to eligible business travel only. Commuting between home and a regular workplace is generally not deductible. Keep contemporaneous records of date, miles, purpose, and destination for every business trip to claim the deduction.

Question 4

How does the mileage deduction work for Uber, DoorDash, and delivery drivers?

Accepted Answer

Delivery drivers and rideshare drivers can deduct business miles driven while carrying passengers, picking up orders, or delivering goods. The mileage between your home and your first delivery or passenger pickup is generally considered commuting and not deductible. Once you are actively working, every mile driven for a trip counts. This calculator applies the current IRS standard mileage rate to estimate how much those business miles reduce your taxable gig income.

Question 5

What is the difference between income tax and self-employment tax?

Accepted Answer

Income tax is based on your total taxable income and marginal tax bracket. Self-employment tax is a separate 15.3 percent tax that covers Social Security and Medicare contributions. Traditional employees split this with their employer, but independent workers pay the full amount. This calculator combines both into a single effective rate so you can set aside one reserve amount instead of calculating each separately.

Question 6

Can I deduct mileage if I work from home and drive to clients?

Accepted Answer

If you have a home office that qualifies as your principal place of business, miles driven from your home to client locations are generally deductible business miles. If you do not have a qualifying home office and your home is not your principal place of business, the first miles from your home to your first work location may be considered commuting and not deductible. Consult IRS Publication 463 or a tax professional for your specific situation.

Side-Hustle Tax Estimator

Estimated Tax Reserve

Estimate a side-hustle tax set-aside

How the calculation works

Worked example

What this estimate does not include

Sources and further reading

Tax reserve questions

Make one more money decision

Keyboard Shortcuts

⚖️ Side-Hustle Tax Estimator