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Real estate & rental

Real Estate Agent Tax Calculator

What to set aside from commission for tax, including both halves of self-employment tax.

Your numbers

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Result

Set aside for tax $34,515
Net business income $88,000
Self-employment tax $12,434
Income tax $22,081
Each quarterly payment $8,629
Effective rate on net income 39.22%
Set aside $34,515, an effective 39.22% of net business income. That is $8,629 per quarterly payment, and it includes $12,434 of self-employment tax that an employee would only pay half of.

Not tax advice. Deduction rules, mileage rates and self-employment tax treatment change annually and depend on your entity, your state and the rest of your return. Use this to plan a set-aside, and confirm the actual figures with an accountant before filing anything. This is a simplified estimate using marginal rates rather than brackets, and it ignores the qualified business income deduction, retirement contributions, the Social Security wage cap and any credits, all of which can change the result substantially. Self-employed agents generally must make quarterly estimated payments or face penalties.

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Questions

About this calculator

Why is self-employment tax so high?

Because you pay both the employee and employer halves of Social Security and Medicare. An employee sees 7.65% on their payslip; the self-employed pay 15.3%, with half deductible against income tax.

Do I have to pay quarterly?

Generally yes, once you expect to owe a meaningful amount. Missing estimated payments incurs penalties even if you settle in full at filing.

What is the wage cap?

The Social Security portion stops applying above an annual earnings threshold, so high earners pay a lower marginal rate on the excess. This calculator does not model it, which makes it conservative at higher incomes.

The formula

self-employment tax on 92.35% of net earnings, then income tax on net less half the SE tax

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