Self-Employed Tax Calculator

Self-employment tax can be one of the biggest surprises for new freelancers and independent contractors. Unlike W-2 employees who split Social Security and Medicare taxes with their employers, self-employed individuals pay both portions.

The self-employment tax rate is 15.3%: - 12.4% for Social Security (on income up to $168,600 in 2024) - 2.9% for Medicare (on all income) - Additional 0.9% Medicare tax on income over $200,000

However, there are important deductions and strategies:

1. Self-Employment Tax Deduction: You can deduct half of your self-employment tax from your taxable income. This works like the employer portion that W-2 workers don't see taxed.

2. Qualified Business Income (QBI) Deduction: Eligible self-employed individuals can deduct up to 20% of their qualified business income, significantly reducing taxable income.

3. Business Expenses: Deduct legitimate business expenses including home office, equipment, software, travel, and professional development.

4. Health Insurance: Self-employed individuals can deduct 100% of health insurance premiums for themselves, spouses, and dependents.

5. Retirement Contributions: SEP-IRAs and Solo 401(k)s allow contributions up to $66,000+ in 2024.

This calculator incorporates all these factors to give you an accurate estimate of your actual tax burden and take-home pay.