Estimate your combined Tennessee state (0%) and federal self-employment tax as a freelancer or 1099 contractor. Plan to set aside roughly 25-30% of net income.
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Get Matched with a CPA →Tennessee has no state income tax on wages or self-employment income. The state eliminated its Hall Tax on investment income in 2021, making it completely income-tax-free. Freelancers in Tennessee only owe federal income tax and self-employment tax. The state relies on sales tax revenue instead, with one of the highest combined state and local sales tax rates.
Since Tennessee has no state income tax, freelancers only need to worry about federal income tax and the 15.3% self-employment tax. This simplifies tax planning significantly.
All self-employed individuals in Tennessee must make quarterly estimated tax payments to the IRS if they expect to owe $1,000 or more. Since there's no state income tax, you only need to make federal quarterly payments. Our calculator above gives you the exact quarterly amounts based on your income.
Based on the absence of state income tax in Tennessee, we recommend setting aside approximately 25-30% of your net self-employment income for taxes. This covers federal income tax, self-employment tax (15.3%), and any applicable local taxes.
The exact percentage varies based on your total income, filing status, and deductions. Use the calculator above for a personalized estimate, then set up automatic transfers to a dedicated tax savings account each time you receive a payment.
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