How much should a freelancer set aside for taxes?

The 25 to 30 percent rule is a starting point, not an answer. Your number depends on your state, your deductions and whether you have other income.

A worked example

A designer in Raleigh with $90,000 of revenue and $15,000 of expenses has $75,000 of net profit. Self-employment tax is about $10,600. After half of that is deducted and the standard deduction applies, federal income tax is about $7,900 and North Carolina adds about $2,900. That is roughly $21,400, or 24 percent of revenue.

Why a percent of revenue

You can move money the day a client pays, before you know the year's expenses. Ashford recalculates the percent every month as your year fills in.