What Does a self employed person pay for taxes in 2025? How to calculate both rates?

Thanks for explaining! So if I understand correctly, the SE tax applies to one amount and the income tax to a different (lower) amount? Does the self-employed person also get to claim any other deductions before calculating either tax?

Yes, you've got it right! The SE tax applies to 92.35% of your net business income, while income tax applies to your adjusted gross income after deductions. Self-employed individuals can take several additional deductions before calculating income tax. You can deduct half of your SE tax from your income. You may also qualify for the Qualified Business Income deduction (up to 20% of qualified business income). Plus, you can take either the standard deduction ($13,850 for single filers in 2024) or itemize deductions like mortgage interest, certain state taxes, and charitable contributions.

Did you have to upload your actual tax documents to use it? Not super comfortable with that tbh. Did it actually give you specific advice for your situation or just general info?

How accurate was it compared to what you actually ended up paying? I've used a few calculators before that were way off from what I actually owed. Last year I thought I'd get a refund but ended up owing almost $4k which was a nasty surprise!

You don't have to upload full tax returns if you're not comfortable with that. You can just upload specific documents like 1099s or expense reports, or even just enter the numbers manually. It gives you specific calculations based on your inputs, not just generic info. The estimates were surprisingly accurate for me. What made the difference was it accounted for all the self-employment specific deductions properly. The regular calculators I tried before missed things like the QBI deduction and the SE tax deduction, which made their estimates way off. I was expecting to owe about $5k more than I actually did once everything was properly calculated.

Wait, does this actually work? I've literally spent HOURS on hold with the IRS and eventually gave up. How much did this end up costing?

Sounds fake honestly. The IRS is completely unreachable - I filed an amended return 10 months ago and still haven't heard anything. Even if you did get through, how do you know the agent gave you correct info? I've heard horror stories about getting different answers from different agents.

Yes, it actually works! The system holds your place in the IRS queue and calls you back when an agent is about to be available. I was skeptical too but it saved me hours of frustration. I understand the concern about getting accurate information. The key is to ask for the agent's ID number and take detailed notes of the conversation. I actually got really helpful guidance about how the self-employment tax is calculated (the 92.35% factor I didn't know about) and how to properly document my home office deduction. The agent even emailed me the specific IRS publications that covered my situation so I could document everything properly.

How do you figure out how much to pay for estimated taxes? Is it just dividing what you expect to owe for the year by 4? And what are the deadlines for these payments?

The safest way is to take your expected tax liability for the year (both income tax and self-employment tax) and divide by 4 for equal payments. Many people use tax software or work with an accountant to project this amount. For 2025, the quarterly estimated tax payment deadlines are typically April 15th, June 15th, September 15th, and January 15th (of the following year). These dates can shift slightly if they fall on weekends or holidays.

That's actually really good advice. I usually aim for 25-30% too. Better to have a little extra set aside than come up short. I keep it in a separate savings account so I'm not tempted to spend it!

Your math looks pretty close! Just a couple small adjustments - the income tax calculation gets a bit more complex with the tax brackets. That $41,907 of taxable income wouldn't all be taxed at 22%. The first $11,000 is taxed at 10%, then $11,001-$44,725 at 12%, so most of it would actually be at the 12% rate, not 22%. Also don't forget about the QBI deduction you mentioned - that could be up to 20% of your qualified business income, which would reduce your taxable income even further before calculating that income tax. So your total tax burden might be even lower than your estimate! The key takeaway you got right though - it's definitely not the scary 37.3% on the full $60k that people initially think. These separate calculations make a huge difference.

Great question! For quarterly estimated payments, you don't need to recalculate everything from scratch each time. Most people use one of these approaches: 1. **Safe Harbor Rule**: Pay 100% of last year's total tax liability divided by 4 (or 110% if your prior year AGI was over $150k). This protects you from penalties even if you end up owing more. 2. **Current Year Projection**: Do the full calculation once at the beginning of the year based on your expected income, then divide by 4. You can adjust if your income changes significantly. 3. **Simple Percentage**: Many self-employed people just pay 25-30% of their net quarterly income as estimated tax. It's not perfectly precise, but it usually gets you close enough to avoid penalties. The IRS Form 1040ES has worksheets that walk you through the estimation process. You can also use tax software to project your annual liability and calculate the quarterly amounts. The key is being consistent and making sure you're in the ballpark - you'll true up everything when you file your annual return anyway!

Great question about mixed income! Having both W-2 and self-employment income actually works pretty straightforwardly: The self-employment tax (15.3%) only applies to your net business income, never your W-2 wages. So if you made $50k from your day job and $30k net from freelancing, you'd only pay SE tax on that $30k. For income tax purposes, you just add both income sources together to determine your total AGI and tax bracket. Your W-2 wages plus net business income minus the standard deduction (and half your SE tax) gives you your taxable income. One nice thing about having W-2 income is that your employer already withholds taxes on that portion, so you may need to make smaller estimated quarterly payments on just the business income. Just make sure the combination of your W-2 withholding plus estimated payments covers your total expected tax liability. The timing of leaving your day job mid-year actually works in your favor for planning - you'll have several months of withholding from your employer to help cover your total tax bill!

This is such great advice about record keeping! I'm just starting my freelance journey and honestly hadn't thought about tracking mileage or home office expenses properly. Do you have any recommendations for apps or tools that make this easier, or is a simple spreadsheet really the way to go? Also, I'm curious about the SEP-IRA - is there a minimum income requirement to set one up? I'm probably only going to make around $25k-30k in my first year of self-employment, so I want to make sure it's worth setting up retirement accounts at that income level. The home office deduction is something I've been nervous about because I've heard it can trigger audits. Have you had any issues with that, or is it pretty straightforward as long as you have good documentation?