Small Business Tax Calculator

That 92.35% adjustment mirrors how an employer's half of payroll tax is excluded from a W-2 employee's taxable wages — self-employed taxpayers get an equivalent reduction before the self-employment tax rate is applied, rather than paying the full rate on 100% of net earnings. It's a long-standing feature of how self-employment tax is structured, not a rounding shortcut.

No. That surtax applies above statutory income thresholds that vary by filing status and isn't modeled here — this calculator only applies the standard 15.3%/2.9% self-employment tax split. Business owners with income well above the Social Security wage base should budget for a somewhat higher total tax liability than this estimate shows.

Gross Income minus Business Expenses produces net business income, which flows into the federal income tax calculation, while Self-Employment Income is a separate figure representing the net earnings subject specifically to self-employment tax. They're often close to the same number for a sole proprietor, but keeping them separate lets the calculator handle cases where not all business income counts as self-employment earnings.

The IRS generally expects self-employed taxpayers to pay roughly a quarter of their annual tax liability by each estimated payment deadline throughout the year. Comparing this calculator's Quarterly Estimate against what you've actually paid, shown in the Remaining Tax Due figure, helps catch a shortfall before it accumulates into a larger bill and potential penalty at filing time.