Quarterly estimates, self-employment tax, deductions and the mileage log
In one paragraph
Nobody withholds tax from a contractor's checks, so the tax arrives four times a year and the government charges a penalty if you are late even when you end up owing nothing extra. A sole proprietor owes 15.3% self-employment tax on top of income tax, federal estimates are due in four equal installments, and California's are front-loaded 30/40/0/30. The 2026 business mileage rate is 72.5 cents per mile, but only with a log. Here is the set-aside percentage, the calendar, and the deductions an electrician actually has.
The rule
Self-employment tax is 15.3% of net earnings (12.4% Social Security plus 2.9% Medicare), owed once net earnings reach $400 (IRS). Individuals who expect to owe $1,000 or more must make federal estimated payments on Form 1040-ES (IRS). California requires estimates when you expect to owe at least $500, paid 30% by April 15, 40% by June 15, 0% by September 15 and 30% by January 15 (FTB). The 2026 business standard mileage rate is 72.5 cents per mile (IRS Notice 2026-10).
Why it matters
The first-year contractor who spends what the bank account shows discovers in April that a third of it was never theirs. Set-asides from every draw and a calendar with the four dates turn the largest surprise in the first year into a routine transfer.