How much should you be setting aside for taxes?
A handful of questions, about two minutes. What your own target percentage comes to in dollars, checked against the one number the IRS actually holds you to — the safe harbor based on last year's return.
Free, and no card. This tool doesn't pick a percentage for you — it checks the one you already have in mind.
Informational only — not audit, attest, legal, tax, or investment advice. This is arithmetic on the figures you enter and on published IRS rules; it is only as good as they are, and it isn't a substitute for your own return or your accountant.
The number the IRS actually checks, not the one that feels safe
Most owners set aside a round percentage of profit for taxes because it’s simple and it’s what they’ve always done. The IRS doesn’t grade on whether that number feels responsible — it measures against a specific rule: pay at least 100% of what you owed last year during the year (110% if your prior-year income was above a set threshold), or face an underpayment penalty regardless of how reasonable your own percentage seemed.
This tool takes the percentage you’re already planning to set aside, shows what it comes to in dollars against this year’s expected profit, and checks that figure against the IRS safe harbor computed from your own last return — so a shortfall shows up now, while there’s still time to adjust, instead of as a penalty next spring.
Frequently asked questions
What percentage should I set aside?
This tool doesn't tell you — no single percentage is right for every business, entity type, state and tax bracket, and picking one anyway would mean inventing a figure nobody checked against your actual situation. Enter the percentage you or your accountant already have in mind, and this tool tells you what it comes to in dollars and whether it clears the IRS safe harbor.
What is the IRS safe harbor, and why does it matter more than my own percentage?
It's the minimum the IRS actually holds you to: pay at least 100% of last year's federal tax during the year (110% if last year's adjusted gross income was over $150,000, or $75,000 if you filed separately), and you're protected from the underpayment penalty no matter how this year turns out. A flat percentage that sounds reasonable can still fall short of that minimum — this tool checks the two against each other and shows the gap in dollars.
Why doesn't this apply to a C corporation?
The 100%/110% rule, including the AGI test, is the individual rule — it applies when a business's profit is taxed on the owner's own return: a sole proprietorship, a partnership, or an S corporation. A C corporation pays its own corporate tax under a different rule with no personal-AGI test, so this tool stops rather than run the wrong comparison.
Does this compute my self-employment tax?
No. Self-employment tax is a defined fraction of net earnings from self-employment, computed on Schedule SE, and this tool hasn't verified that fraction from the issuing source — so it states the rule it does check (the safe harbor) and stays quiet on the one it can't verify, rather than guess.
Do I need an account?
No. Every figure here is free with no email wall. Signing in only keeps the result so a later run can show you what moved.