As a self-employed individual, you are responsible for paying both income tax and self-employment tax. This calculator helps you estimate your total tax liability based on your business income, expenses, and other taxable income.
What is Self-Employment Tax?
Self-employment tax is a tax consisting of Social Security and Medicare taxes primarily for individuals who work for themselves. It is similar to the Social Security and Medicare taxes withheld from the pay of most wage earners. For 2023, the self-employment tax rate is 15.3% on the first $160,200 of net earnings from self-employment, and 2.9% for Medicare tax on all net earnings.
Social Security Tax: 12.4%
Medicare Tax: 2.9%
The calculation is based on 92.35% of your net earnings from self-employment. You can deduct one-half of your self-employment tax when calculating your adjusted gross income.
What is Income Tax?
Income tax is levied on your total taxable income, which includes your net earnings from self-employment (after the deduction for one-half of self-employment tax) and any other income you may have (like W-2 wages). Your taxable income is further reduced by deductions, such as the standard deduction or itemized deductions. The tax rates depend on your filing status and income bracket.
How the Calculator Works:
Net Earnings from Self-Employment: This is calculated as your Gross Business Income minus your Deductible Business Expenses.
Taxable Base for Self-Employment Tax: We multiply your Net Earnings from Self-Employment by 0.9235 to determine the amount subject to SE tax.
Self-Employment Tax Calculation: The SE tax is calculated at 15.3% (12.4% Social Security up to the annual limit + 2.9% Medicare on all earnings).
Deduction for One-Half of SE Tax: Half of the calculated SE tax is deductible, reducing your Adjusted Gross Income (AGI).
Total Taxable Income: This is calculated as your Other Taxable Income + (Net Earnings from Self-Employment * 0.9235) – (One-Half of SE Tax) – Standard Deduction (or itemized if applicable, but we use standard for simplicity here).
Income Tax Calculation: This is estimated using progressive tax brackets. Note: This calculator uses a simplified approach for income tax and does not account for all potential deductions, credits, or specific tax bracket changes. For precise calculations, consult a tax professional.
Total Tax Liability: The sum of your estimated Self-Employment Tax and Income Tax.
Example Calculation:
Let's assume:
Gross Business Income: $75,000
Deductible Business Expenses: $10,000
Other Taxable Income: $20,000
Standard Deduction (Single Filer): $13,850
Step 1: Net Earnings from Self-Employment = $75,000 – $10,000 = $65,000
Step 2: Taxable Base for SE Tax = $65,000 * 0.9235 = $60,017.50
Step 3: Total SE Tax = $60,017.50 * 0.153 = $9,182.67
Step 4: Deduction for One-Half SE Tax = $9,182.67 / 2 = $4,591.33
Step 5: Taxable Income Base for Income Tax = $20,000 (Other Income) + $60,017.50 (SE Taxable Base) – $4,591.33 (SE Tax Deduction) = $75,426.17
Step 6: Assuming a single filer, taxable income after standard deduction = $75,426.17 – $13,850 = $61,576.17.
Income tax calculation for $61,576.17 (using 2023 single filer rates):
10% on first $11,000 = $1,100
12% on income between $11,001 and $44,725 ($33,724) = $4,046.88
22% on income between $44,726 and $95,375 ($61,576.17 – $44,725 = $16,851.17) = $3,707.26
Total Estimated Income Tax = $1,100 + $4,046.88 + $3,707.26 = $8,854.14
This calculator provides an estimation only. Tax laws are complex and subject to change. Consult with a qualified tax professional for personalized advice and accurate calculations. The income tax calculation is a simplified estimate and does not account for all tax credits, deductions, or specific tax situations.
function calculateTaxes() {
var grossIncome = parseFloat(document.getElementById("grossIncome").value);
var businessExpenses = parseFloat(document.getElementById("businessExpenses").value);
var otherIncome = parseFloat(document.getElementById("otherIncome").value);
var standardDeduction = parseFloat(document.getElementById("standardDeduction").value);
// Validate inputs
if (isNaN(grossIncome) || grossIncome < 0) {
grossIncome = 0;
}
if (isNaN(businessExpenses) || businessExpenses < 0) {
businessExpenses = 0;
}
if (isNaN(otherIncome) || otherIncome < 0) {
otherIncome = 0;
}
if (isNaN(standardDeduction) || standardDeduction < 0) {
standardDeduction = 0;
}
// — Self Employment Tax Calculation —
var netEarningsSE = grossIncome – businessExpenses;
if (netEarningsSE < 0) netEarningsSE = 0;
var taxableBaseSE = netEarningsSE * 0.9235;
if (taxableBaseSE < 0) taxableBaseSE = 0;
var socialSecurityLimit = 160200; // For 2023
var socialSecurityTax = 0;
var medicareTax = taxableBaseSE * 0.029;
if (taxableBaseSE <= socialSecurityLimit) {
socialSecurityTax = taxableBaseSE * 0.124;
} else {
socialSecurityTax = socialSecurityLimit * 0.124;
medicareTax = taxableBaseSE * 0.029; // Medicare applies to all earnings
}
var totalSETax = socialSecurityTax + medicareTax;
var seTaxDeduction = totalSETax / 2;
// — Income Tax Calculation (Simplified – using 2023 Single Filer Brackets) —
var incomeTaxRates = [
{ limit: 11000, rate: 0.10 },
{ limit: 44725, rate: 0.12 },
{ limit: 95375, rate: 0.22 },
{ limit: 182100, rate: 0.24 },
{ limit: 231250, rate: 0.32 },
{ limit: 578125, rate: 0.35 },
{ limit: Infinity, rate: 0.37 }
];
var taxableIncomeBeforeDeduction = otherIncome + taxableBaseSE;
var totalTaxableIncome = taxableIncomeBeforeDeduction – seTaxDeduction – standardDeduction;
if (totalTaxableIncome < 0) totalTaxableIncome = 0;
var incomeTax = 0;
var previousLimit = 0;
for (var i = 0; i previousLimit) {
var taxableAmountInBracket = Math.min(totalTaxableIncome, currentLimit) – previousLimit;
incomeTax += taxableAmountInBracket * rate;
}
if (totalTaxableIncome <= currentLimit) {
break;
}
previousLimit = currentLimit;
}
// — Final Results —
var totalTax = totalSETax + incomeTax;
document.getElementById("taxResult").innerText = "Self-Employment Tax: $" + totalSETax.toFixed(2);
document.getElementById("seTax").innerText = "Income Tax (Est.): $" + incomeTax.toFixed(2);
document.getElementById("incomeTax").innerText = "Total Tax Liability (Est.): $" + totalTax.toFixed(2);
document.getElementById("totalTax").innerText = ""; // Clear previous total tax if any
}