Freelancer Taxes in the US
As a freelancer or self-employed individual, you're responsible for paying both the employee and employer portions of Social Security and Medicare taxes — totaling 15.3% of net self-employment income. This is on top of regular federal income tax. Planning ahead with quarterly payments prevents a large tax bill at year end.
Self-Employment Tax Explained
SE tax = net self-employment income × 15.3%. You can deduct half the SE tax from your gross income before calculating federal income tax. This reduces your federal tax burden slightly. Net SE income = gross revenue – business expenses.
Quarterly Estimated Tax Payments
If you expect to owe $1,000+ in taxes, pay estimated taxes quarterly (April 15, June 15, September 15, January 15). A safe harbor rule: pay 100% of last year's tax liability (or 110% if prior-year AGI exceeded $150,000) to avoid underpayment penalties.
Frequently Asked Questions
Yes. If you use part of your home exclusively and regularly for business, you can deduct home office expenses (actual expenses or simplified method: $5/sq ft up to 300 sq ft).
Gross income is total revenue before any deductions. Net self-employment income = gross revenue – business expenses. SE tax and income tax are calculated on net income.
No, state income tax is not included. Add your state rate estimate manually to the federal results for a complete picture.