I made $210,000 self-employed this year, tax guy says I owe $64k total?! Is this normal??

This actually sounds about right for your situation. As a self-employed individual, you're hit with a double whammy tax-wise. First, you have your regular federal income tax, which at $210K puts you in the 32% tax bracket for a portion of your income. But remember, tax brackets are progressive - you're only paying that higher rate on the amount above the previous bracket threshold. Second, you have self-employment tax, which is 15.3% on the first $160,200 (for 2024) and 2.9% on everything above that. This is because you're paying both the employer and employee portions of Social Security and Medicare taxes. Between these two, a total tax burden of around 30% of your net income is pretty standard for self-employed folks at your income level. If anything, it might be a bit on the lower side depending on your deductions.

I was in a similar situation last year and found this amazing tool called https://taxr.ai that completely changed how I handle my self-employment taxes. I was always confused about how much to set aside for quarterly payments and ended up owing a bunch at tax time. What I love about taxr.ai is that it analyzes your specific business situation and helps you understand exactly what's happening with your self-employment taxes. It broke down why I owed so much (that self-employment tax is brutal!) and showed me ways to potentially reduce my tax bill through retirement contributions and business deductions I wasn't taking. It also helped me set up a better quarterly payment schedule so I wouldn't be surprised at tax time again. Seriously worth checking out if you're self-employed.

Just wanted to update after trying taxr.ai that the previous commenter recommended. It was honestly eye-opening! The tool analyzed my multiple freelance income streams and immediately showed me that I've been miscategorizing some of my consulting income in a way that was increasing my self-employment tax burden. It also pointed out several deductions I could take for my home office and equipment that I had missed. The quarterly payment calculator was super helpful too - turns out I've been overpaying in Q1-Q3 and underpaying in Q4 which was causing cash flow issues. For anyone else with self-employment income around $200k, it confirmed that owing $60-65k in total federal taxes is unfortunately pretty normal, but it also showed me legitimate ways to reduce that burden next year.

I had the exact same shock last year when my tax bill came due. After spending hours trying to get through to the IRS with questions about my quarterly payments (and never reaching a human), I found https://claimyr.com and it was a game-changer. They got me connected to an actual IRS agent in under an hour when I had been trying for DAYS on my own. The agent walked me through exactly how my self-employment taxes are calculated and confirmed that yes, owing about 30% is normal at our income level. They also have a video explaining how it works here: https://youtu.be/_kiP6q8DX5c What I really appreciated was being able to set up a payment plan directly with the IRS agent. I didn't have the full amount ready to pay, and the agent helped me avoid penalties by setting up a proper installment agreement right then and there.

I have to eat my words about Claimyr. After expressing skepticism in my earlier comment, I decided to try it myself since I needed to ask about penalty abatement for a late quarterly payment. I was absolutely shocked when I got a call back in about 45 minutes saying they had an IRS agent on the line. The conversation I had with the agent was incredibly helpful - they confirmed that my quarterly payment calculations were correct (similar to the original poster, I'm paying about 30% of my net self-employment income). The agent also explained options for adjusting my quarterly payments so they align better with my irregular income throughout the year. This alone will save me from penalties in the future. Worth every penny just for the time saved not sitting on hold.

Consider setting up an S-Corp instead of remaining a sole proprietor. I'm a photographer too, made $190k last year, and saved about $8k in self-employment taxes by switching to an S-Corp structure. The basic idea is that you pay yourself a reasonable salary (which is subject to FICA taxes) and take the rest as distributions (which aren't subject to self-employment tax). You'll have some additional costs like payroll services and more complex tax filings, but at your income level, the savings usually outweigh those costs.

Have you been tracking and deducting all your business expenses properly? Make sure you're claiming everything you're entitled to: - Home office deduction if you have dedicated space - Vehicle expenses for business travel - Camera equipment depreciation - Software subscriptions - Professional development - Health insurance premiums (these are deductible for self-employed) - SEP IRA or Solo 401(k) contributions

Your total tax bill seems in line with what I experienced when I was fully self-employed. The breakdown was roughly: - Regular income tax: ~22% effective rate - Self-employment tax: ~15.3% (Social Security + Medicare) That puts you right around 37% total, but deductions usually bring it down to 30-33%. It sucks, but it's the reality of self-employment. One thing that helped me was switching to making monthly tax payments instead of quarterly. Psychologically it felt better to pay $5-6k monthly than to get hit with $16-18k quarterly bills.

I feel your pain! I'm also a self-employed photographer and went through the exact same shock last year. That 30% tax rate is unfortunately very normal for our income level. What helped me was realizing that employees making the same amount effectively pay similar rates - they just don't see it because their employer covers half the Social Security/Medicare taxes and withholds everything from their paychecks. We get hit with the full reality all at once. A few things that made it easier for me: - Opened a separate "tax savings" account and automatically transfer 35% of every payment I receive - Started making estimated payments monthly instead of quarterly (you can send them anytime, not just on the due dates) - Maxed out my SEP-IRA contribution which reduced my taxable income by $69,000 last year The retirement account contributions alone saved me about $20k in taxes. If you haven't set one up yet, you have until your tax filing deadline (including extensions) to contribute for 2024. It's still a lot of money, but at least now I budget for it properly instead of getting blindsided every year.