Side Hustle Profit Tracker

Revenue − expenses − self-employment tax − income tax → real take-home from a side gig.

Inputs

Schedule C deductible: software, mileage (per IRS 67¢/mi 2024), home office, supplies, marketing.

Sets your marginal tax bracket. Side-hustle income stacks on top.

0% for AK/FL/NV/SD/TN/TX/WA/WY. CA top ~13.3%; NY top ~10.9%.

Used to compute effective hourly rate after all taxes.

Result

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How to use this calculator

  • Estimate annual revenue and ALL deductible expenses (software, mileage at IRS 67¢/mi 2024, home office, supplies, professional development).
  • Enter W-2 income — sets the marginal bracket the side hustle stacks into.
  • Pick filing status and state — flat-state approximation is rough but good enough for planning.
  • Hours/year sets the effective-hourly-rate output — the single most useful number.

About this calculator

A side hustle nets less than the headline revenue number — by a lot. The math: revenue minus deductible business expenses gives Schedule C net income, which is subject to 15.3% self-employment tax (Social Security 12.4% up to the SS wage base ~$184k for 2026 plus Medicare 2.9% on everything). Half of the SE tax is deductible against income tax. The Section 199A QBI deduction shaves another 20% off taxable side-hustle income for most sole proprietors below phase-out thresholds. Then federal income tax stacks on top of your W-2 day-job income at your MARGINAL bracket (not your effective rate) — a 22% W-2 earner doing $20k of side hustle pays 22% federal on most of it, not 10-22% averaged. Plus state. Empirical effective total tax rate on side-hustle income for a typical $80k-W-2 earner: ~30-40%. The "hourly equivalent" line is the realistic number to evaluate whether the side hustle is worth your time vs other ways of spending those hours.

Frequently asked

Why is the effective tax rate on a side hustle so high?+
Three layers: (1) full 15.3% SE tax (employee pays only 7.65% on W-2 — employer pays the other half, but you pay BOTH as a sole proprietor); (2) marginal income tax stacks at your top bracket, not your average; (3) state tax adds another 0-13% depending on state. Net effective: 30-40% is normal for a $80k-W-2 earner.
What expenses can I deduct?+
Anything "ordinary and necessary" for the business (IRS §162). Common: software/subscriptions, professional development, mileage at IRS standard rate (67¢/mi 2024), home office (Form 8829, simplified $5/sqft × up to 300 sqft), supplies, marketing. Personal expenses don't count even if you "use them for the side hustle".
What is the QBI deduction?+
Section 199A of the 2017 TCJA created a 20% deduction on qualified business income for pass-through entities (sole props, LLCs, S-corps). For most side-hustle sole proprietors below ~$242k single / $484k MFJ taxable income, you get the full 20%. Above those, phase-outs reduce or eliminate it depending on profession (specified service trades like doctors/lawyers/consultants lose it faster).
Should I form an LLC for a small side hustle?+
For a low-revenue side hustle (< $50k), usually no — Schedule C as a sole prop is the simplest tax form and an LLC by default is taxed identically. LLC adds liability protection (worth ~$200/yr in state fees) but no tax change. S-corp election starts saving SE tax around $40-60k of net income but adds payroll + accounting costs (~$2k/yr).
How accurate is the W-2 stacking?+
The calculator uses 2026 IRS brackets with full bracket-by-bracket stacking — the marginal calculation is accurate to ±$10 for a $20k side hustle. The two simplifications: (1) state tax modeled as flat (most states have brackets but the average effective is close); (2) QBI phase-outs not modeled — only matters above $242k taxable income.
Source?+
IRS Pub 334 (Tax Guide for Small Business); Pub 535 (Business Expenses); Schedule C / SE / 8829 forms; IRS Rev. Proc. 2025-32 §3 (2026 brackets); §199A QBI per IRC; SSA 2026 wage base projection.

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