The Freelancer's Tax Burden
Unlike W-2 employees, freelancers are responsible for both the employer and employee portions of Social Security and Medicare taxes, commonly known as Self-Employment (SE) Tax.
Key Components
- Self-Employment Tax: Currently 15.3% on the first $160,200 of net income (for 2023).
- Federal Income Tax: Your net profit (after half of SE tax is deducted) is taxed at standard federal brackets.
- State Tax: Varies significantly by state, with some having 0% and others reaching over 10%.
Note: This tool provides estimates only. Always consult with a tax professional for accurate filing.