Side Hustle Income Tracker

Your side gig brought in $4,200 last quarter, you spent some of that on supplies and software, and you want to know what's profit, what's deductible, and how much to set aside for taxes so April doesn't turn into a disaster. The IRS expects quarterly estimated payments if you owe more than $1,000 in tax — news to a lot of new freelancers.

The tracker takes income and expense entries, calculates net profit, and applies an estimated self-employment tax (15.3% on net earnings, plus your federal bracket). The output gives you a target amount to set aside — typically 25-30% of net profit covers federal for most middle-bracket earners. Adjust upward for state tax. This is rough math, not a CPA's blessing.

The math: gross income minus business expenses gives net profit. Net profit × 92.35% (the SE tax adjustment factor) × 15.3% gives self-employment tax. Net profit also feeds into your federal income tax on top of any W-2 income, taxed at your marginal bracket. Half of the SE tax is deductible against income tax (the "deduction for one-half of SE tax"), which softens the blow slightly. State income tax stacks on top at your state's rate. The combined hit for someone in the 22% federal bracket is usually around 35-40% of net profit — which is why the 25-30% set-aside is conservative for low-bracket earners and aggressive for high earners.

A worked example: you earned $20,000 from freelance work, spent $4,000 on software and supplies. Net profit: $16,000. SE tax: 16,000 × 0.9235 × 0.153 ≈ $2,261. Half deductible: $1,130 reduces taxable income. Federal income tax depends on your other income; assume you're in the 22% bracket — that adds 22% × ($16,000 - $1,130) ≈ $3,271. State at 5%: $800. Total tax bill from the side hustle: $2,261 + $3,271 + $800 ≈ $6,332. That's 31.7% of your gross or 39.6% of net profit. Set aside accordingly each time you get paid, and you won't be scrambling in April.

Where the tracker is intentionally rough: it doesn't handle the home-office deduction (square footage method or simplified method), the qualified business income deduction (QBI, 20% pass-through deduction for many businesses), depreciation on equipment, or the variety of credit eligibility (retirement saver's credit, EITC implications). Health insurance premiums for self-employed people are deductible above-the-line, which the tracker doesn't account for. State tax treatment of self-employment income varies widely — California treats it harshly with high rates plus the SE adjustment; Texas and Florida have no state income tax at all. For anything beyond a casual side gig, talking to a CPA once a year is worth the few hundred dollars; for tracking month to month, this calculator catches the big things.