Sole Proprietor Tax Estimate Calculator
Estimate the total federal tax a sole proprietor owes — self-employment tax plus income tax — from net business profit and other income.
How it works
SE tax = 15.3% × (net profit × 92.35%), SS capped at $168,600 · AGI = profit + other − ½ SE tax · Taxable = AGI − deduction · Income tax = 2024 single brackets on taxable
A sole proprietor pays two federal taxes on business profit: self-employment tax (Social Security and Medicare, 15.3% on 92.35% of net profit) and ordinary income tax on taxable income. Half of the SE tax is deductible above the line, which lowers AGI before the income-tax brackets are applied. This estimate uses 2024 single-filer brackets and the standard deduction as a starting point.
Worked example
On $80,000 profit, SE tax is 15.3% × (80,000 × 0.9235) = about $11,304. Half of that ($5,652) reduces AGI to $74,348; after the $14,600 standard deduction, taxable income is $59,748, giving roughly $8,168 of income tax — around $19,472 in total federal tax.
Frequently asked questions
Why is self-employment tax so high?
As a sole proprietor you pay both the employee and employer halves of Social Security and Medicare — 15.3% combined — whereas an employee splits that 15.3% with their employer. That is why SE tax often exceeds income tax at moderate profit levels.
Does this include state income tax?
No. This estimate is federal only. Most states also tax business income, and rates range from 0% to over 13%, so add your state liability separately.
What deduction should I enter?
For 2024 the single standard deduction is $14,600 ($29,200 married filing jointly). Enter your itemized total instead if it is larger.
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Educational estimate using simplified US federal rules — ignores state tax, credits and your full situation. Not tax advice; confirm with a CPA or IRS guidance.