Shop Talk: Estimated Taxes – The 30 Percent Rule

Looking back  to the very first year that I made enough income from freelancing for gaming publications to have to pay estimated taxes, I was freaked out. Like very freaked out. On one hand it meant I was doing well – making some decent money and pushing closer to my goal of eventually quitting my day job as a news reporter and pursuing game-focused writing full-time. On the other hand, it meant being forced to wade neck-deep into the murky, putrid swamp of tax hell.

Estimated taxes in particular are the bane of every freelance noob, and the first year you’re stuck doing them is usually the most confusing and terrifying. How the hell do you hit a moving target that fluctuates widely depending on how much income you make from one year to the next? Very carefully. It gets easier after you clear that first hurdle. Since every person’s situation is different, I’ll leave the real in-depth nitty-gritty on estimated taxes to the tax professionals. But one piece of advice that I’ve come to live by as a freelancer when it comes to estimated taxes and keeping your ass covered is to follow the 30 percent rule. More on that in a minute.

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