Tax Obligation Estimator

Marcus had his best year freelancing yet. His design business cleared $84,000 in net profit, up from $52,000 the year before. He felt like he was finally getting ahead. Then he opened his tax software in April and saw the number he owed: $19,300. He had set aside $6,000. The gap was real money he no longer had.

Here's what the software didn't warn him about in real time, and what most people learn the hard way. A self-employed worker owes two separate taxes on the same profit. The first is income tax, calculated on your taxable income after the standard deduction. The second is self-employment tax, which covers Social Security and Medicare. In 2026, self-employment tax runs 15.3% (12.4% for Social Security plus 2.9% for Medicare) on 92.35% of your net earnings, with the Social Security portion applying up to a wage base of $184,500.

For Marcus, the self-employment tax alone on $84,000 of profit came to roughly $11,900 before any income tax was added. A W-2 employee never sees this number directly, because their employer quietly pays half and withholds the rest from every paycheck. When you work for yourself, you cover the whole thing, and nobody withholds a cent unless you arrange it.

Then comes the income tax. On top of that $11,900, Marcus owed federal income tax on his taxable income after the standard deduction, which pushed his total well past what he'd guessed. He also lost the cushion a salaried worker takes for granted: a steady paycheck with taxes already removed. His profit landed in his business account looking like spendable cash, so he spent it. The tax bill was always coming; it just stayed invisible until the return was filed.

The fix he never set up was simple. Had he paid the IRS in four chunks during the year, the way an employer would have withheld it, April would have been a non-event. Instead he treated tax as a year-end problem, and a year-end problem on income you've already spent is the worst kind.

That is the trap that catches under-withheld workers too. You take a second job, sell stock, or pick up contract income on the side, and no tax comes out of it. Your day-job withholding was calibrated for your day-job salary, not the extra $15,000 you earned on top. The shortfall doesn't show up until you file, and by then the year is over and the money is spent.

This tool exists to move that reveal from April to right now. You enter your expected income, the tax you've already paid through withholding and any estimated payments, and your credits. It returns an estimate of your total tax for the year and tells you whether you're on track for a balance due or a refund, while you still have months to adjust.