Save 25 to 30 percent of every payout
You owe both self-employment tax and regular income tax. Plan for both.
- Self-employment tax is 15.3 percent of your profit (12.4 percent Social Security plus 2.9 percent Medicare).
- Federal income tax adds another 10 to 24 percent on top. California adds 1 to 9.3 percent for most gig drivers.
- Open a separate bank account for taxes. Move 25 percent of every payout in. Pay from there.
- Quarterly is safer than waiting until April.
SourceIRC §1401; IRS Pub 505