Calculate your real profit from side income after self-employment tax, federal tax, and state tax. See what you actually keep from Uber, Etsy, freelance, or rental income.
Side income stacks on top of your W-2 income, so it’s taxed at your marginal rate — not your average rate. If your day job puts you in the 22% bracket, every dollar of side hustle income starts there and potentially pushes you into the 24% bracket.
Self-employment tax (15.3%) is the hidden cost of 1099 income. When you’re employed, your employer pays half of Social Security and Medicare taxes. As a side hustler, you pay both halves. The IRS lets you deduct half of SE tax from your gross income, but the full 15.3% still comes out of your pocket.
Rental income is different: it’s classified as passive income, so you don’t owe self-employment tax on it. However, you can’t deduct rental losses against your W-2 income if your adjusted gross income exceeds $150,000 — the passive activity loss rules phase out the deduction entirely.
Quarterly estimated tax payments are required if you’ll owe $1,000 or more in tax on your side income. The IRS charges approximately 8% annualized interest as a penalty for underpayment, so it’s worth setting aside money each quarter rather than waiting until April.