Freelance Tax Calculator
Curious about how to calculate freelance taxes? Use our free tool to better understand your tax obligations based on current self-employment tax rates in the United States.
This data was calculated using only estimated income, the standard deduction based upon filing status, and the self-employment tax deduction.
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About the Freelance Tax Calculator
The freelance revolution has transformed the modern workforce landscape. An unprecedented number of professionals are embracing the autonomy and work-life balance this career path provides. In fact, more than one in four (28%) of knowledge workers now work as freelancers. As a self-employed individual, you have the freedom to work on your own terms, but with that freedom comes the responsibility to understand your tax obligations. Upwork’s Freelance Tax Calculator is designed to help you get an idea of how much you may need to pay in taxes so you can plan accordingly. Please note that no tool can replace professional advice from a qualified accountant, tax preparer or tax attorney. This tool only provides estimates based on the information you input, and it is always best to consult a tax professional about your specific situation to determine your tax obligation. The calculator is designed for U.S. taxpayers earning U.S. income.
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Frequently asked questions
The Freelance Tax Calculator provides an estimate of the amount of taxes owed by freelancers. To use the calculator, simply enter your projected freelance income (after accounting for estimated expenses and deductions), select your filing status, and click on your state of residence. The calculator then provides you with an estimated breakdown of the federal, state and self-employment taxes owed. This will give you an idea of how much you can expect to owe in taxes for the year, and can help you plan your finances accordingly.
Yes, if you do freelance work and are not an employee of a company, you may be considered self-employed by the Internal Revenue Service (IRS). For more information, visit IRS.gov.
Consulting a tax professional can help ensure that you are filing correctly and taking advantage of all deductions and credits available to you. When choosing a tax professional, it is important to review their credentials and understand their capabilities. The two primary credentials in the U.S. for tax professionals are Certified Public Accountant (CPAs) and Enrolled Agent (EA). To obtain these credentials, individuals must undergo education and pass rigorous exams. In addition, both designations mandate ongoing education to ensure proficiency in the latest tax developments.
Self-employment tax is a type of tax liability for certain self-employed individuals. Understanding self-employment tax is critical because failing to pay it can result in penalties, interest charges, and even legal action.
Quarterly estimated tax payments are payments some freelancers make four times a year to cover their federal income tax liability. Form 1040-ES includes a worksheet that can help you determine the amount to pay based on projected income and expenses.
In the United States, quarterly payments are due in April, June, September, and January of the following year. Here are the due dates for the 2025 tax year:
- First-quarter payments: April 15, 2025
- Second-quarter payments: June 16, 2025
- Third-quarter payments: Sept. 15, 2025
- Fourth-quarter payments: Jan. 15, 2026
Most freelancers start their work as Sole Proprietors. This means the IRS does not see your business as separate from yourself. There are other options you might consider as your business grows. Three common ways a freelance business could operate include:
- Partnership: This requires at least one other individual than yourself to operate.
- S-Corporation: This is similar to a partnership but you can use this business structure without any outside parties. Further, this structure could provide some self-employment tax benefits.
- C-Corporation: This framework is much less common for freelancers starting out. It requires more administration and may be less tax efficient. However, if you are offering a scalable service and would like to sell the business in the future this tax structure provides some benefits.
While there are advantages and disadvantages to each, these tax structures come with additional administrative and filing responsibilities. Consult your tax professional to see if one of these options is right for you.
A limited liability company (LLC) is a type of corporate structure that provides the owner some protection from personal liability for the debts and liabilities of the business. It is important to understand that one of the purposes of an LLC is to separate your business activities and assets from your personal activities and assets. The rules surrounding LLC formation vary by state. It typically involves filing Articles of Organization with the Secretary of State in the state in which you wish to create your business. It is advisable to consult with a legal expert regarding your specific questions and concerns. Seeking guidance on forming an LLC? Find legal professionals on Upwork.
This Freelance Tax Calculator is meant to be a starting place. Taxes can be complicated so it’s wise to consult a tax professional. You can find many accountants and tax preparers on the Upwork platform. For more general questions, the IRS’ Self-Employed Individuals Tax Center is an excellent resource.
The Freelance Tax Calculator was created for educational purposes for independent professionals in the U.S. Given that the needs and circumstances of each individual business can differ, the information provided may apply to some freelancers and not others. Upwork does not provide any legal advice, and as always, freelancers remain responsible for complying with all laws and requirements in operating their business.
