How do auto tax buckets work?

Gig workers are responsible for paying their own taxes — but the IRS doesn't make that easy when income lands sporadically across multiple platforms. Kronos's auto tax bucket sets aside a percentage of every gig deposit automatically, so you never get caught at tax time.

How it works

1. Go to Profile → Auto-Tax
2. Enable Auto-route
3. Set the percentage you want to set aside (we suggest 25–30% for self-employment + federal + state)
4. Save

From that point forward, every classified gig deposit (Uber, DoorDash, Instacart, etc. — anything Kronos detects as gig income) is automatically split:

• The set-aside percentage moves to your tax bucket
• The remaining amount lands in your spendable wallet balance

Where the money sits

Funds in your tax bucket are held as USDB (a USD-pegged stablecoin) in a sub-position separate from your spendable balance. They:

• Stay yours — never co-mingled with company funds
• Are excluded from your spendable balance, so you can't accidentally spend them
• Can be moved out manually whenever you want (e.g., to pay quarterly estimated taxes)

How much should I set aside?

The right percentage depends on your tax bracket and state. Common starting points:

• Federal self-employment tax: 15.3% (Social Security + Medicare)
• Federal income tax: 12–22% for most gig workers
• State income tax: 0–10% depending on state (TX, FL, WA, NV, TN, AK, SD, WY, NH have no state income tax)
• Total: typically 25–35% — start at 25% and adjust based on a CPA's recommendation

For a quick estimate of your annual tax liability, try the Kronos Gig Tax Estimator.

How to use the saved tax bucket

The IRS expects self-employed workers to pay quarterly estimated taxes (April 15, June 15, September 15, January 15). When a quarterly deadline approaches:

1. Go to Tax Bucket → Withdraw to wallet
2. Pull the amount you need to pay quarterly taxes
3. Send it to the IRS via irs.gov/payments/direct-pay or your state's equivalent portal

Important caveats

• Kronos isn't a tax advisor. The percentages above are common starting points, not personalized advice. Talk to a CPA for your specific situation.
• Auto-routing can be turned off anytime — your tax bucket balance stays put, future deposits just won't be split.
• Only deposits Kronos classifies as gig income are routed. Personal P2P transfers, your own moves between accounts, and refunds are not included.
• You can override classification on any deposit — see gig earnings article

Year-end 1099 prep

At year-end, export a per-platform earnings CSV from Earnings → Export. The platforms themselves will send you 1099-NECs for amounts over $600 — Kronos's CSV is a backup verification source so you can spot any discrepancies before filing your Schedule C.