How Much Tax Will I Pay on $30,000 Being Self-Employed?
Earning $30,000 self-employed? Your final tax liability is based on your net profit, not gross income. Understand the key calculations for what you'll owe.
Being self-employed means you operate a business as a sole proprietor or independent contractor. The Internal Revenue Service (IRS) considers you self-employed if you have net earnings of $400 or more from these activities. Unlike traditional employment where an employer withholds taxes, you are responsible for paying them directly to the government.
As a self-employed individual, you are subject to two primary federal taxes on your business income: self-employment tax and federal income tax. Self-employment tax covers your Social Security and Medicare contributions, while federal income tax is calculated on your overall taxable income.
Determining Your Net Business Profit
The first step in figuring out your tax liability is calculating your net business profit. This is the amount left after subtracting all business-related expenses from your gross income of $30,000. The IRS allows you to deduct expenses that are both “ordinary and necessary” for your business, meaning they are common and appropriate for your industry.
Common deductible expenses include a portion of your phone and internet bills, software, and office supplies. If you use your vehicle for business, you can deduct the actual costs or use the standard mileage rate. The home office deduction can be calculated using a simplified method of $5 per square foot (up to 300 square feet) or a regular method based on the percentage of your home used for business.
For example, from a $30,000 gross income, you might have $5,000 in business expenses consisting of:
- A portion of your internet and phone bills for $1,200
- Software and online services for $800
- Office supplies for $500
- Vehicle expenses for $1,500
- A simplified home office deduction for $1,000
Subtracting these expenses leaves you with a net business profit of $25,000. This figure is calculated on Schedule C and is the starting point for your federal tax obligations.
Calculating Your Federal Tax Bill
With a net business profit of $25,000, the next step is to calculate your federal tax bill. These taxes are calculated in sequence, as the result of the self-employment tax calculation affects the income tax calculation.
Self-Employment Tax
Self-employment tax is comprised of Social Security and Medicare taxes. While employees split these taxes with their employer, a self-employed person pays both halves for a total rate of 15.3%. This tax is not applied to your entire net profit; you first multiply your net profit by 92.35% to determine your taxable net earnings.
Using the $25,000 net profit, the amount subject to tax is $23,087.50 ($25,000 x 92.35%). Multiplying this by the 15.3% tax rate results in a self-employment tax of $3,532.39. This amount is calculated on Schedule SE.
Federal Income Tax
After determining your self-employment tax, you calculate your federal income tax. First, find your Adjusted Gross Income (AGI) by deducting one-half of your self-employment tax from your net business profit. In our example, you subtract half of the $3,532.39 self-employment tax ($1,766.20) from your $25,000 net profit, giving you an AGI of $23,233.80.
From your AGI, subtract the standard deduction to find your taxable income. For a single filer in 2025, the standard deduction is $14,600, leaving $8,633.80 in taxable income. This amount is subject to federal income tax brackets, with the first portion taxed at 10% and any amount in the next bracket taxed at 12%.
Your total estimated federal tax liability is the sum of the self-employment tax ($3,532.39) and the federal income tax calculated on your $8,633.80 of taxable income.
Understanding State and Local Taxes
Your tax obligations do not end with the federal government. Most self-employed individuals must also pay income taxes to their state and sometimes their city or county. These taxes are separate from and in addition to your federal tax liability.
The process for calculating state and local taxes often mirrors the federal system, but rules and tax rates vary significantly by jurisdiction. States have their own forms, deduction rules, and tax brackets. Some states have a flat tax, others have a progressive system, and a few have no income tax.
To determine your liability, you must consult the department of revenue for the state and locality where you conduct business. Their official websites provide the necessary forms, instructions, and tax rate schedules.
How and When to Pay Your Taxes
The U.S. tax system is “pay-as-you-go,” meaning self-employed individuals must pay estimated taxes in quarterly installments. This is required if you expect to owe at least $1,000 in tax for the year. These payments must cover both your self-employment and federal income taxes.
The IRS has four due dates for quarterly payments:
- April 15 for income earned January 1 – March 31
- June 15 for income earned April 1 – May 31
- September 15 for income earned June 1 – August 31
- January 15 (of the next year) for income earned September 1 – December 31
You can make estimated tax payments electronically through IRS Direct Pay, the Electronic Federal Tax Payment System (EFTPS), or by card. You can also mail a check with a Form 1040-ES payment voucher. Use the worksheet in this form to estimate your income and calculate the required payment for each quarter to avoid underpayment penalties.