Side Hustle Tax Calculator
Estimate taxes on your side hustle income including self-employment tax, income tax, and quarterly payment amounts.
Side hustle income, whether from freelancing, gig work, selling products online, or any other self-employed activity, is subject to both income tax and self-employment tax in the United States. Understanding these obligations helps you avoid surprises at tax time and plan your quarterly estimated payments.
Self-employment tax covers Social Security and Medicare contributions. When you work for an employer, these taxes are split between you and your employer. As a self-employed individual, you pay both halves. The current self-employment tax rate is 15.3 percent, broken down as 12.4 percent for Social Security (on income up to the annual wage base) and 2.9 percent for Medicare (on all income with no cap). However, you can deduct the employer-equivalent portion (7.65 percent) from your adjusted gross income.
Income tax on side hustle earnings depends on your total taxable income and filing status. This calculator uses simplified US federal tax brackets to estimate your income tax liability on the side hustle portion. Your effective rate depends on your combined income from all sources.
To calculate your net side hustle income, start with gross revenue and subtract all legitimate business expenses. Common deductible expenses include supplies, equipment, software subscriptions, home office costs, mileage for business travel, and professional development. Keeping detailed records of expenses throughout the year is essential for minimizing your tax burden.
If you expect to owe more than 1,000 dollars in taxes for the year, the IRS requires quarterly estimated tax payments. These are due on April 15, June 15, September 15, and January 15 of the following year. This calculator divides your annual estimated tax by four to show your quarterly payment amount, helping you budget throughout the year and avoid underpayment penalties.