- Self-employment tax: 15.3% (12.4% Social Security up to $184,500 + 2.9% Medicare) on 92.35% of net profit; half is deductible. SE tax calculator.
- Income tax: federal brackets plus your state’s.
- Quarterly estimated taxes (Form 1040-ES): April, June, September, January.
- Deductions: ordinary and necessary business expenses — software, equipment, home office (if it qualifies), a share of phone/internet, professional fees, health insurance premiums for the self-employed.
- QBI deduction: many sole proprietors may deduct up to 20% of qualified business income, subject to limits.
- Records: keep receipts and a monthly P&L (free bookkeeping template).
See how much to set aside. General information only, not tax advice.