Side Hustle Tax Calculator

See how much you actually keep after taxes on your side income.

Income

W-2 Income (Day Job)

Side Hustle Income

Business Expenses

Filing Status

State Tax Rate (%)

Quarterly Payments Made

Have health insurance through employer

Total Tax on Side Income

$8,707

Effective Rate

39.6%

Take-Home

$13,293

SE Tax (15.3%)

$3,109

Federal Income Tax

$4,498

State Tax

$1,100

SE Tax Deduction

-$1,555

Quarterly Estimate

$2,177

Still Owed

$8,707

Tax Breakdown

Gross Side Income$25,000

Business Expenses-$3,000

Net Side Income$22,000

Self-Employment Tax-$3,109

Additional Federal Tax-$4,498

Additional State Tax-$1,100

Take-Home Side Income$13,293

Tax-Saving Tips

Your effective rate on side income is 39.6% — high because SE tax (15.3%) stacks on top of your marginal income tax rate.
You likely need to make quarterly estimated tax payments to avoid an underpayment penalty. Use Form 1040-ES.

Simplified estimate. Actual tax may vary based on deductions, credits, and state-specific rules.

How Side Hustle Income Is Taxed

Side hustle income is taxed twice: once through self-employment tax (15.3% — covering Social Security and Medicare) and again through federal and state income tax at your marginal rate. Unlike W-2 employment where your employer pays half the payroll tax, you pay the full amount yourself. The silver lining: you can deduct half of SE tax from your taxable income, and legitimate business expenses reduce your tax bill further.

Tax on Side Income by W-2 Salary Level

Single filer, $10,000 net side income, 5% state tax:

W-2 Salary	Marginal Rate	SE Tax	Income Tax	Total Tax	Effective Rate
$40,000	12%	$1,530	$1,700	$3,230	32.3%
$60,000	22%	$1,530	$2,700	$4,230	42.3%
$80,000	22%	$1,530	$2,700	$4,230	42.3%
$100,000	24%	$1,530	$2,900	$4,430	44.3%
$150,000	24%	$1,530	$2,900	$4,430	44.3%

Common Side Hustle Tax Deductions

Deduction	How It Works	Example Savings
Home Office	$5/sq ft (simplified) or actual expenses	$1,500/yr (300 sq ft)
Vehicle Mileage	67¢/mile (2026 IRS rate)	$3,350 (5,000 miles)
Equipment & Supplies	100% of business use	Varies
Software & Subscriptions	Business-use portion	$500–$2,000/yr
Phone & Internet	Business-use percentage	$600–$1,200/yr
Health Insurance	100% if self-employed	$6,000–$18,000/yr

Frequently Asked Questions

Do I need to pay quarterly taxes on side income?

If you expect to owe $1,000 or more in tax from side income, you should make quarterly estimated payments using Form 1040-ES. Due dates: April 15, June 15, September 15, and January 15. Missing payments triggers an underpayment penalty — essentially interest on what you owed. Use our Quarterly Tax Calculator for exact amounts.

When should I form an LLC or S-Corp for my side hustle?

An LLC provides liability protection but doesn't change your taxes (still reported on Schedule C). An S-Corp election can save on self-employment tax when side income exceeds $40,000–$50,000 — you pay yourself a "reasonable salary" (subject to payroll tax) and take the rest as distributions (not subject to SE tax). The tradeoff: additional filing costs ($500–$1,500/year for payroll and S-Corp return).