A simple tax buffer for irregular freelance income

Every freelancer knows the feeling: a great few months, then a tax bill that wipes out the savings. The money was earned, but it was spent long before the bill arrived.

Set it aside on day one

Open a separate savings account used only for tax. Each time a client pays, move a fixed percentage into it the same day, before you spend anything. Out of sight, it stops feeling like your money, which is exactly right, because it is not.

Choosing the percentage

The right figure depends on your country, your income and your expenses, so ask an accountant once and write the number down. If you are unsure while you wait, set aside slightly more rather than less. An end-of-year surplus is a pleasant surprise; a shortfall is not.

Automate if you can

Some banks let you split incoming payments automatically. If yours does, set it up and remove the decision entirely.

This article is general information and not tax advice. Rules differ between countries, so check with a qualified professional.