Business Tax Bracket Estimator
Estimate your business tax liability
Enter your gross revenue and deductible expenses to estimate federal income tax on net profit. Check the box if you are self-employed to include SE tax.
Estimating federal tax on business income for self-employed individuals
If you operate as a sole proprietor, single-member LLC, freelancer, or independent contractor in the United States, you are taxed on your net business profit rather than on gross revenue. Net profit is your gross revenue minus all allowable business deductions. This calculator helps you estimate the federal income tax due on that net profit using the 2024 tax brackets.
Self-employed individuals face an additional tax that employees do not: the self-employment tax. This covers Social Security (12.4 percent) and Medicare (2.9 percent) contributions that employers normally split with their employees. Because self-employed people are both employer and employee, they pay both halves, for a combined rate of 15.3 percent. However, the tax applies to 92.35 percent of net profit rather than the full amount, and you can deduct half of the self-employment tax when calculating your adjusted gross income.
The combination of income tax and self-employment tax means that self-employed people at moderate income levels can face effective total tax rates significantly higher than employees earning similar amounts. Understanding this is essential for setting aside the right amount for quarterly estimated tax payments.
US 2024 federal income tax brackets (single filer)
The federal income tax is progressive, meaning higher income is taxed at higher rates. For 2024, the brackets for a single filer are: 10 percent up to $11,600, 12 percent from $11,601 to $47,150, 22 percent from $47,151 to $100,525, 24 percent from $100,526 to $191,950, 32 percent from $191,951 to $243,725, 35 percent from $243,726 to $609,350, and 37 percent above $609,350. These brackets apply to taxable income after deductions, not to gross business revenue.
What deductions should I include?
Common deductible business expenses include home office costs, vehicle mileage or actual vehicle expenses, software and subscriptions, professional services fees, business travel, marketing and advertising, health insurance premiums (for self-employed), retirement contributions, and equipment depreciation. Keeping accurate records of these throughout the year reduces your tax liability and reduces the chance of problems if audited.
Should I make quarterly estimated tax payments?
Yes. Self-employed individuals who expect to owe $1,000 or more in federal tax for the year are generally required to make quarterly estimated tax payments. These are due in April, June, September, and January. Failing to make these payments can result in underpayment penalties. This calculator gives you an annual estimate that you can divide by four to arrive at a rough quarterly payment amount.
