Running your own business can be taxing enough.
So make sure you pay only the taxes you owe.
Running your own business can be taxing enough.
So make sure you pay only the taxes you owe.
If you’ve done the work all year, we’ll pre-fill your annual 1040 Schedule C form, ready to be shared with your accountant or the IRS.
Get an instant estimate of your tax liability for 2022.
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Get an instant estimate of your tax liability for 2022.
Here’s the short version: as a freelancer, you pay two types of taxes – the self-employment tax and the income tax.
The self-employment tax is a flat 15.3% on your net income. It covers your contribution to Social Security (12.4%) and Medicare (2.9%). You owe self-employment tax, no matter how much money you make.
You owe taxes on your net income at the federal and the state level (unless your state doesn’t have an income tax). The percentage depends on your net income and filing status. And, it’s progressive, meaning you don’t pay the same percentage on all of your income.
Your net income as a freelancer is the result of your gross profit (how much money you made) minus your business expenses (how much money you spent to run your business).
Check out these articles for tips about how to prepare for tax season, reduce your taxes, and file your taxes in an organized way.
Determine your 2021 tax rate based on your taxable income. Remember, the US tax system is progressive, so not all of your taxable income is taxed at the same rate.
Whether you have a specific tax question or are just generally unsure about tax season, we clear up some of the confusion below.