Estimate your combined Washington 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 →Washington State has no traditional state income tax, making it favorable for freelancers. However, Washington does impose a 7% capital gains tax on gains exceeding $250,000. Additionally, Washington has a Business & Occupation (B&O) tax that applies to gross receipts for certain business activities, though many small freelancers fall below the threshold.
Since Washington 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 Washington 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 Washington, 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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