Freelance tax calculator
Enter your expected profit to see self-employment tax, federal income tax, and the amount to set aside each quarter.
- Net profit from self-employment$60,000.00
- Self-employment tax (15.3% of 92.35%)Social Security and Medicare, both halves$8,477.73
- Half of it is deductible-$4,238.87
- Qualified business income deduction (20%)-$11,152.23
- Federal income tax on the profit$3,173.07
- Quarterly estimated payment$2,912.70
- Share of profit going to tax19.42%
How to use it
- Enter your expected net profit for the year: what's left after expenses, not your gross sales.
- Pick your filing status, and add any W-2 wages so the profit is taxed in the right bracket.
- Leave the 20% deduction on unless you know you don't qualify.
- Read the total to set aside and the quarterly payment. Sending that amount by each due date avoids the underpayment penalty.
Worked example
$60,000 profit, single, no other income, no state tax.
Net earnings $55,410; self-employment tax $8,477.73. Half of that, $4,238.87, is deductible, and the 20% deduction takes off $11,152.23. Taxable income is $60,000 − $4,238.87 − $11,152.23 − $16,100 = $28,508.90, so federal income tax is $3,173.07. Set aside $11,650.80 for the year, or $2,912.70 a quarter, about 19.4% of profit.
How it's calculated
net earnings = profit × 92.35%
self-employment tax = 12.4% of net earnings up to the $184,500 Social Security base (less any W-2 wages) + 2.9% Medicare on all of it, plus 0.9% above $200,000
taxable income = wages + profit − half the self-employment tax − 20% qualified business income deduction − standard deduction
federal income tax on the profit = tax on taxable income − tax on wages alone
set aside = self-employment tax + federal income tax + state tax; quarterly payment = set aside ÷ 4
FAQ
Why is self-employment tax so high?
As an employee you pay 7.65% for Social Security and Medicare and your employer pays the other 7.65%. Self-employed, you pay both halves, 15.3%, on 92.35% of your profit. You do get to deduct half of it from income, which softens it a little.
When are quarterly payments due?
15 April, 15 June, 15 September and 15 January of the following year. If you also have a job, you can raise your W-4 withholding instead of sending payments; the IRS treats withholding as paid evenly through the year.
Do I owe this on reselling profit?
If it's an ongoing activity meant to make money, yes: it's self-employment income reported on Schedule C, and you owe self-employment tax once net earnings reach $400, which the calculator applies. Selling your own used belongings at a loss isn't taxable.
What is the 20% deduction?
The qualified business income deduction lets most sole proprietors and pass-through owners deduct 20% of their business income from taxable income. It phases out for certain service businesses above roughly $200,000 of taxable income ($400,000 married), which is why the calculator warns at that level.
Does this cover state tax?
Only through the flat rate you enter. State rules on the self-employment deduction and business income vary; use your state's rate on taxable income as an approximation.