Calculate your estimated income tax and self-employment tax obligations.
Single
Married Filing Jointly
Married Filing Separately
Head of Household
Your estimated total tax will appear here.
Understanding Sole Proprietor Taxes
As a sole proprietor, you are considered an individual business owner, and your business income is taxed as personal income. You are also responsible for paying self-employment taxes (Social Security and Medicare) in addition to regular income tax. This calculator helps you estimate these obligations.
Key Components of Sole Proprietor Taxation:
Gross Business Income: This is the total revenue generated from your business activities before any expenses are deducted.
Deductible Business Expenses: These are the ordinary and necessary costs incurred in operating your business. Examples include supplies, rent for office space, utilities, advertising, and professional fees. Keeping meticulous records is crucial for maximizing these deductions.
Net Earnings from Self-Employment: This is calculated as Gross Business Income minus Deductible Business Expenses. This figure represents the profit from your business.
Self-Employment Tax: Sole proprietors pay both the employer and employee portions of Social Security and Medicare taxes. The Social Security tax rate is 12.4% up to an annual earnings limit, and the Medicare tax rate is 2.9% with no income limit. For 2023, the Social Security limit was $160,200. For 2024, it's $168,600. The tax is calculated on 92.35% of your net earnings from self-employment.
Deduction for One-Half of Self-Employment Tax: You can deduct one-half of your self-employment tax liability when calculating your adjusted gross income (AGI). This effectively reduces your overall income tax.
Income Tax: This is calculated on your taxable income after deducting one-half of your self-employment tax. The income tax rates are progressive and depend on your filing status (Single, Married Filing Jointly, etc.) and the total taxable income.
How the Calculation Works:
The calculator performs the following steps:
Calculate Net Earnings: It subtracts your deductible business expenses from your gross business income.
Calculate Self-Employment Taxable Base: It multiplies your net earnings by 0.9235 (92.35%) to determine the base on which self-employment tax is calculated.
Calculate Self-Employment Tax: It applies the Social Security rate (12.4% up to the annual limit) and the Medicare rate (2.9%) to the self-employment taxable base.
Calculate SE Tax Deduction: It divides the total self-employment tax by 2.
Calculate Taxable Income for Income Tax: It subtracts the SE Tax Deduction from your initial taxable income (Gross Income – Expenses).
Estimate Income Tax: It applies the relevant federal income tax brackets based on your filing status and the calculated taxable income for income tax. Note: This calculator provides a simplified estimate and does not include all potential deductions, credits, or state/local taxes.
Total Estimated Tax: It sums the estimated income tax and the calculated self-employment tax.
Important Considerations:
Tax laws and rates can change annually. This calculator uses approximate rates for the most recent tax year available. Always consult with a qualified tax professional for personalized advice.
This calculator does not account for state and local income taxes.
Other deductions and credits (e.g., retirement contributions, health insurance premiums, dependents) can significantly impact your final tax liability and are not included here.
Estimated tax payments may be required quarterly to avoid penalties.
function calculateTaxes() {
var grossIncome = parseFloat(document.getElementById("grossIncome").value);
var businessExpenses = parseFloat(document.getElementById("businessExpenses").value);
var taxableIncomeBeforeSE = parseFloat(document.getElementById("taxableIncome").value);
var filingStatus = document.getElementById("filingStatus").value;
var resultDiv = document.getElementById("result");
resultDiv.innerHTML = "Your estimated total tax will appear here.";
if (isNaN(grossIncome) || grossIncome < 0) {
resultDiv.innerHTML = "Please enter a valid Gross Business Income.";
return;
}
if (isNaN(businessExpenses) || businessExpenses < 0) {
resultDiv.innerHTML = "Please enter valid Deductible Business Expenses.";
return;
}
if (isNaN(taxableIncomeBeforeSE) || taxableIncomeBeforeSE < 0) {
resultDiv.innerHTML = "Please enter valid Total Taxable Income Before SE Tax Deduction.";
return;
}
var netEarnings = grossIncome – businessExpenses;
if (netEarnings < 0) netEarnings = 0; // Net earnings cannot be negative for SE tax calculation base
var seTaxBase = netEarnings * 0.9235;
if (seTaxBase < 0) seTaxBase = 0;
// Using 2023/2024 tax year rates for estimation.
// Social Security limit for 2023: $160,200; for 2024: $168,600. Using 2024 limit as it's more current.
var socialSecurityLimit = 168600;
var socialSecurityRate = 0.124; // 12.4%
var medicareRate = 0.029; // 2.9%
var socialSecurityTax = Math.min(seTaxBase, socialSecurityLimit) * socialSecurityRate;
var medicareTax = seTaxBase * medicareRate;
var totalSETax = socialSecurityTax + medicareTax;
var seTaxDeduction = totalSETax / 2;
var incomeTaxableBase = taxableIncomeBeforeSE – seTaxDeduction;
if (incomeTaxableBase < 0) incomeTaxableBase = 0;
// Simplified Income Tax Brackets (using 2024 for illustration; these are estimates)
var federalIncomeTax = 0;
var rates = [];
if (filingStatus === "single") {
rates = [
{ limit: 11600, rate: 0.10 },
{ limit: 47150, rate: 0.12 },
{ limit: 100525, rate: 0.22 },
{ limit: 191950, rate: 0.24 },
{ limit: 243725, rate: 0.32 },
{ limit: 609350, rate: 0.35 },
{ limit: Infinity, rate: 0.37 }
];
} else if (filingStatus === "married_jointly") {
rates = [
{ limit: 23200, rate: 0.10 },
{ limit: 94300, rate: 0.12 },
{ limit: 201050, rate: 0.22 },
{ limit: 383900, rate: 0.24 },
{ limit: 487450, rate: 0.32 },
{ limit: 693750, rate: 0.35 },
{ limit: Infinity, rate: 0.37 }
];
} else if (filingStatus === "married_separately") {
rates = [
{ limit: 11600, rate: 0.10 },
{ limit: 47150, rate: 0.12 },
{ limit: 100525, rate: 0.22 },
{ limit: 191950, rate: 0.24 },
{ limit: 243725, rate: 0.32 },
{ limit: 346875, rate: 0.35 },
{ limit: Infinity, rate: 0.37 }
];
} else if (filingStatus === "head_of_household") {
rates = [
{ limit: 16550, rate: 0.10 },
{ limit: 63100, rate: 0.12 },
{ limit: 132750, rate: 0.22 },
{ limit: 207700, rate: 0.24 },
{ limit: 260450, rate: 0.32 },
{ limit: 609350, rate: 0.35 },
{ limit: Infinity, rate: 0.37 }
];
} else {
resultDiv.innerHTML = "Please select a valid filing status.";
return;
}
var remainingIncome = incomeTaxableBase;
var previousLimit = 0;
for (var i = 0; i 0) {
if (currentLimit === Infinity) {
taxableAmountInBracket = remainingIncome;
} else {
taxableAmountInBracket = Math.min(remainingIncome, currentLimit – previousLimit);
}
if (taxableAmountInBracket > 0) {
federalIncomeTax += taxableAmountInBracket * rate;
remainingIncome -= taxableAmountInBracket;
}
}
previousLimit = currentLimit;
if (remainingIncome <= 0) break;
}
var totalEstimatedTax = federalIncomeTax + totalSETax;
resultDiv.innerHTML = "Estimated Total Tax: $" + totalEstimatedTax.toFixed(2) + "" +
"(Includes Income Tax: $" + federalIncomeTax.toFixed(2) + " + Self-Employment Tax: $" + totalSETax.toFixed(2) + ")";
}