Freelancer tax set-aside: tracking it month by month (and the IRS periods that aren't quarters)

The hard part of freelance taxes usually isn't the maths. It's having the money when the payment is due. The fix is to set aside a share of every payment as it arrives and check, month by month, that the savings account keeps up. This page covers the tracking. Your rate, and anything tax-specific to you, is a question for a tax professional.

1. Pick a set-aside rate and apply it to every payment

Choose one percentage, for example 25% or 30%, based on your situation and your accountant's advice. Every time money arrives, move that share of the gross payment into a separate savings account the same day. A spreadsheet row per payment makes it automatic:

Date        Client        Amount     Set aside (25%)
2026-01-12  Acme Corp     $2,400.00  $600.00
2026-01-28  Northwind     $1,180.00  $295.00

2. Log what you actually pay

Each estimated payment you send goes on its own list. Your tax savings balance is then:

balance = starting balance + total set aside − total tax paid

If that goes negative, your rate is too low or a payment went to the wrong account. Better to find out in May than in April next year.

3. The IRS "quarters" aren't quarters

US estimated-tax periods are uneven, which catches out spreadsheets that sum by calendar quarter:

Due dates move when they fall on a weekend or holiday. Check irs.gov (Form 1040-ES) each year. Summing April–June instead of April–May for period 2 puts June's income in the wrong period.

4. Expenses: record the business share only

For mixed-use costs such as your phone, internet or a laptop you also use personally, record the amount paid and the business percentage, and track only the business share. Keep the receipt either way. A column that flags missing receipts saves a painful hunt later.

A monthly five-minute check

• Every payment this month has a set-aside, and it has actually been moved.
• Every expense has a category, a business % and a receipt.
• Tax savings balance ≥ 0.
• Payment coming up? Compare the period's set-aside with what you plan to pay.