Self-Employment Tax: What Freelancers Need to Know
10 min
Understanding Self-Employment Tax
Self-employed individuals pay both the employee and employer portions of Social Security and Medicare taxes — totaling 15.3% at the federal level. State income tax is an additional cost.
Quarterly Estimated Payments
Most states require quarterly estimated tax payments if you expect to owe more than $1,000. Deadlines align roughly with federal estimated tax dates.
State-by-State Considerations
States with no income tax (Florida, Texas, Nevada) are popular with freelancers. States with high income tax rates like California and New York require careful quarterly planning.
Deductions for the Self-Employed
Home office, health insurance premiums, retirement contributions, and business expenses can be deducted on both federal and most state returns.
Tip
Tax laws vary by state and change frequently. Use our calculators for the most up-to-date rates and estimates for your specific situation.