Side Hustle Income Calculator – Calculate Taxes & Net Income | SoCalSolver

Self-employment tax calculation: start with net profit (gross income minus business expenses), apply the 92.35% adjustment (to represent the employer portion adjustment), then multiply by 15.3% to compute SE tax. Fifty percent of SE tax is deductible as an adjustment to income, which reduces federal taxable income. These rules follow IRS Schedule SE instructions (https://www.irs.gov/forms/about-schedule-se-form-1040).

Business expenses reduce taxable income. Deductible categories include platform commissions (Fiverr, Upwork), software subscriptions, home office (simplified method or actual expenses), office supplies, equipment (immediate expensing or depreciation), marketing, professional services, and industry-specific costs. Expenses must be ordinary and necessary; documentation and receipts are required per IRS Publication 535 (https://www.irs.gov/publications/p535).

Federal income tax is computed using AGI and current tax brackets. Side hustle income stacks with W-2 income for bracket calculations. The QBI deduction (20%) is applied where eligible and limited by taxable income rules. For bracket rates and inflation adjustments, see the IRS announcement for the applicable tax year (https://www.irs.gov/newsroom/irs-provides-tax-inflation-adjustments-for-tax-year-2025).

Quarterly estimated tax payments: if you expect to owe $1,000+ in tax, make estimated payments to avoid penalties. Follow Form 1040-ES instructions and safe harbor rules (pay 90% of current year or 100% of prior year, 110% if AGI > $150K). Payment dates and worksheets are published by the IRS (https://www.irs.gov/forms/about-form-1040-es).

Side hustle income involves three tax systems: self-employment tax (15.3% on net profit), federal income tax (10-37% depending on bracket), and state income tax (0-13.3% depending on state). Combined, your effective tax rate can rise substantially without planning. This calculator shows your net income after taxes so you can set aside the correct amount and plan quarterly payments.

Business deductions are the primary way to lower tax liability. Every dollar of deductible business expense reduces taxable income. Track receipts and use IRS Publication 535 guidance to confirm deductibility (https://www.irs.gov/publications/p535).

Qualified Business Income (QBI) deduction: provides a 20% deduction for eligible business income. Current status: scheduled to expire on December 31, 2025 unless extended by Congress. This page was last updated on 2025-11-01—check the IRS QBI guidance for legislative updates (https://www.irs.gov/newsroom/qualified-business-income-deduction-qbi).

Quarterly estimated tax payments prevent end-of-year surprises and penalties. If you expect to owe $1,000+ for the year, make quarterly payments per Form 1040-ES instructions and safe harbor rules (https://www.irs.gov/forms/about-form-1040-es).

Consider retirement contributions (SEP-IRA) to reduce taxable income and save for retirement. When side hustle income grows, consult a CPA about S-Corp election and other structure changes to reduce payroll-related taxes.