Side Hustle Tax Set-Aside Calculator
Side income usually has no tax withheld. Self-employment tax for Social Security and Medicare comes on top of income tax, so set money aside as you earn it.
Results
How it works
Net profit = income - expenses. Self-employment tax = net x 92.35% x 15.3% (12.4% Social Security plus 2.9% Medicare), and none if net x 92.35% is under $400, per IRS Topic 554. Income tax = (net - half of self-employment tax) x (federal + state rate). Quarterly = total / 4.
FAQ
Where do these rates come from?
IRS Topic 554 (irs.gov/taxtopics/tc554): self-employment tax is 15.3% on 92.35% of net earnings, owed when net earnings are $400 or more, and half of it is deductible.
Does it apply the Social Security wage cap?
No. The 12.4% Social Security part stops at a yearly earnings cap. If your wages plus side income are near it, ask a tax professional.
Do I need to pay quarterly?
Many people with side income pay estimated tax each quarter to avoid penalties. Check IRS Form 1040-ES guidance or a tax professional.
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Estimates, not tax or financial advice. Check important numbers with a qualified professional.