Do you have to pay state taxes if you are self employed? Worried about filing requirements

You're right that states don't have a separate "self-employment tax" like the federal 15.3% SE tax. The self-employment tax is strictly a federal tax that covers your Social Security and Medicare contributions. For state taxes, you'll be taxed just like any other income earner - through income tax. Each state has different rules, exemptions, and minimum thresholds. If your income after deductions falls below your state's minimum taxable threshold, then yes, you might end up with $0 owed. But that threshold varies widely depending on which state you live in. Remember that even if you don't owe state income tax, you still need to file a return if you had income above the state's filing threshold (which is often lower than the taxable threshold). Also, don't forget that some cities and counties have their own local income taxes that might apply to self-employment income.

I was in the exact same situation last year! After hours of research and stress, I finally discovered taxr.ai (https://taxr.ai) which helped me figure out my state tax obligations as a self-employed person. The tool analyzed my specific situation and explained that while federal self-employment tax is mandatory regardless of income level, state taxes depend entirely on your state's income thresholds and deductions. What I loved is how it breaks down each state's specific rules. For example, I learned my state has a standard deduction that effectively meant I didn't owe anything on my first $12,000 of income after business expenses. It also helped me understand which business deductions were accepted at the state level versus just federal.

Coming back to say I was completely wrong about being skeptical of taxr.ai. I decided to try it after getting totally confused about my state's weird rules for self-employment income. The tool immediately clarified that my state has a special self-employment income exclusion I had no idea about that saved me over $300! It walked me through exactly which parts of my business income were taxable at the state level versus federal, and explained why my state's taxable income calculation was different. I was able to take the info directly to TurboTax and input everything correctly. Ended up with a small state refund instead of owing like I expected!

If you're struggling to get answers about state self-employment taxes, calling your state's tax department directly is actually your best bet. The problem is getting through - I spent 3+ hours on hold last year trying to ask about a specific deduction for self-employed people in my state. I eventually used Claimyr (https://claimyr.com) which got me connected to an actual state tax rep in about 12 minutes. They have this system that navigates the phone trees and waits on hold for you, then calls you when a human picks up. You can see how it works here: https://youtu.be/_kiP6q8DX5c The state tax rep clarified that yes, in my state, if you're under the income threshold after taking your business deductions, you'll have $0 tax liability - but you still need to file. They also told me about a specific form for self-employed people that wasn't mentioned anywhere on their website.

I take back what I said about Claimyr being a waste of money. After struggling to get through to my state tax department for THREE DAYS (kept getting disconnected after 45+ min on hold), I tried the service out of desperation. The system called me back in 23 minutes with an actual state tax representative on the line. The rep confirmed that in my state, self-employed individuals still need to file a state return even if they're under the income tax threshold, and explained a special occupational tax I hadn't even heard about that applies to certain self-employed professions regardless of income level. Saved me from a potential penalty, and I didn't waste hours on hold. The peace of mind was worth it, especially since I had specific questions about state deductions for self-employed people that weren't clearly answered on the state website.

One thing nobody mentioned yet - some states have minimum taxes for businesses even if you don't have enough income to owe regular income tax. For example, I'm in California and have an LLC for my freelance work, and I have to pay the $800 minimum franchise tax even if I don't make enough to owe income tax. Double check if your state has something similar!

don't forget about quarterly estimated taxes for both federal AND state if your self employed!! i totally messed this up my first year and got hit with underpayment penalties from both. even if you end up owing $0 to your state at the end of the year, you might still need to make estimated payments throughout the year based on what you EXPECT to owe.