How Much Tax Do I Owe as a Freelancer?

• Self-employment tax: 15.3% on 92.35% of net profit (Social Security + Medicare).
• Federal income tax: progressive brackets from 10% to 37%.
• State income tax: 0% in 9 states, up to ~13% in California.

These are not 'instead of' each other — they stack on the same income. That's the part most freelancers miss.

SE tax: $50,000 × 92.35% × 15.3% = $7,065
Half SE tax deduction: $3,533
Taxable income: $50,000 − $3,533 − $14,600 std. deduction = $31,867
Federal income tax (single): ~$3,604
State (assume 5%): ~$2,500
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Total tax: ~$13,169 (26% of net income)

SE tax: $75,000 × 92.35% × 15.3% = $10,597
Half SE tax deduction: $5,299
Taxable income: $75,000 − $5,299 − $14,600 = $55,101
Federal income tax: ~$7,718
State (assume 5%): ~$3,750
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Total tax: ~$22,065 (29% of net income)

SE tax: $100,000 × 92.35% × 15.3% = $14,130
Half SE tax deduction: $7,065
Taxable income: $100,000 − $7,065 − $14,600 = $78,335
Federal income tax: ~$12,950
State (assume 5%): ~$5,000
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Total tax: ~$32,080 (32% of net income)

A business deduction is more powerful for a freelancer than for a W-2 employee. It reduces your net profit, which means it reduces SE tax (saving 15.3%), federal tax (saving 12-32%), and state tax (saving 0-13%) all at once. A single $1,000 deduction can save a freelancer $300-$500 in real dollars.

A W-2 employee on $75k pays maybe 17% effective federal + payroll tax. A freelancer on $75k net pays closer to 29% — the difference is the employer's half of payroll tax that nobody charged you for as an employee. You feel it as a freelancer because now you're the employer too.

Forget rules of thumb. TaxClutch runs the actual math — your bracket, your state, your deductions, your filing status — and updates the answer every time you log income or an expense. Your 'set aside this month' number is always the right one.