Freelance Income Calculator

As a freelancer or self-employed individual, you're responsible for managing your own taxes, which can be complex and overwhelming. Unlike W-2 employees who have taxes withheld, you must estimate and pay taxes yourself, including self-employment tax.

This free freelance income calculator helps you estimate your tax liability, understand self-employment tax, and plan for quarterly tax payments. It accounts for business expense deductions and gives you a realistic view of your after-tax income.

Use this tool to plan your tax payments, set aside money for taxes, and understand the true cost of being self-employed. Always consult a tax professional for accurate calculations and planning.

Follow these steps to calculate your freelance taxes:

1. 1

   Enter Annual Income

   Input your total annual freelance/self-employment income. This is your gross income before expenses and taxes.

2. 2

   Enter Business Expenses

   Add up all deductible business expenses: home office, equipment, software, travel, meals, etc. These reduce your taxable income.

3. 3

   Review Tax Estimates

   See your net income, self-employment tax, estimated income tax, total tax, and after-tax income. This helps you plan for tax payments.

4. 4

   Plan Quarterly Payments

   If paying quarterly, divide total tax by 4. Set aside this amount each quarter and pay by the deadlines to avoid penalties.

Self-Employment Tax: As a self-employed individual, you pay both employee and employer portions of Social Security and Medicare taxes (15.3% total). However, you can deduct half of this tax from your income tax calculation.

Income Tax: You also pay regular income tax on your net income (after business expenses and SE tax deduction). Rates range from 10% to 37% based on income brackets.

Total Tax Burden: Self-employed individuals typically pay 25-30% of net income in taxes (SE tax + income tax). This is higher than employees because you pay both portions of SE tax.

Quarterly Payments: You must pay estimated taxes quarterly if you expect to owe $1,000+ for the year. Payments are due April 15, June 15, September 15, and January 15.

1. Set Aside 25-30% for Taxes

Immediately set aside 25-30% of every payment into a separate tax savings account. This prevents spending money you'll owe to the IRS and ensures you can pay quarterly taxes.

2. Track All Business Expenses

Use expense tracking apps like Expenvisor to track all business expenses. Every deductible expense reduces your tax burden. Keep receipts and records for tax time.

3. Pay Quarterly Taxes on Time

Pay estimated taxes quarterly to avoid penalties. Use this calculator to estimate quarterly amounts. Adjust payments if income changes significantly during the year.

4. Maximize Deductions

Take advantage of all legitimate business deductions: home office, equipment, software, travel, meals, professional development. Consult a tax professional to ensure you're maximizing deductions legally.

5. Consider an S-Corp

If income is high enough ($50,000+), forming an S-Corp can reduce self-employment tax by paying yourself a reasonable salary and taking the rest as distributions. Consult a tax professional.

6. Work with a Tax Professional

Self-employment taxes are complex. Work with a CPA or tax professional who specializes in self-employment to ensure you're compliant and maximizing deductions.