Are you self-employed?
This includes freelancers and business owners
Estimated Tax Breakup
For $ Annual income
Monthly
Annual
Brackets
Rates
Income
$
Deductions
$
Federal income tax
$
Colorado state income tax
$
FICA tax
$
Self Employment tax
$
Total tax
$
Net pay
$
Marginal and average tax rate
Average tax rate is the effective tax rate that you incur on your income. If your income is $100 with 20% average tax rate and 30% marginal tax rate, you pay $20 in taxes.
Average tax rate is the effective tax rate that you incur on your income. If your income marginal tax rate is the tax rate on the last dollar that you earned. If your income is $100 with 20% average tax rate and 30% marginal tax rate and if you get 1 dollar bonus, you pay 30% tax on that bonus.
Average tax rates measure tax burden, while marginal tax rates measure the impact of taxes on incentives to earn, save, invest, or spend.
W2 employees
Freelancers
W2 employees
Freelancers
How will your net pay increase with increase in your income?
Increment percentage
Increased income
Increased net pay
10%
$
$
25%
$
$
50%
$
$
2X
$
$
3X
$
$
4X
$
$
Summary section
- If you make $ a year living in the region of Colorado, USA, you will be taxed $. That means that your net pay will be $ per year, or $0 per month. Your average tax rate is undefined% and your marginal tax rate is undefined%.
- This marginal tax rate means that your immediate additional income will be taxed at this rate. For instance, an increase of $100 in your salary will be taxed $36.13, hence, your net pay will only increase by $63.87.
Taxes for freelancers vs W-2 employee
The tax system in the US works on a pay-as-you-go basis, so the IRS collects income taxes throughout the year via payroll. Ideally, if you are a W-2 employee, you automatically get your taxes withheld by your employer. However, as a freelancer, taxes aren’t a cakewalk. They have to pay a bit extra in “self-employment tax” to contribute to Social Security and Medicare.
CPA advice for freelancers
If you’re a W-2 employee then most likely, your taxes are already being withheld for you by your employer and you typically get a tax refund. Freelancers, self-employed individuals, and business owners have to handle their own taxes including the quarterly estimated tax payments.
Sounds complicated?
FlyFin can help ease your burden.
With FlyFin you can stay on top of your taxes by paying your quarterly estimated obligations and tracking your business expenses. The A.I. calculates your taxes based on several inputs (your profession & income) and detects all possible deductions which ensures an accurate tax amount.
Tax burden for freelancers vs w2 employees
W2 employees
Freelancers
Freelancers using FlyFin
W2 employees
Freelancers
Freelancers using FlyFin
Income Taxes in Colorado
Taxes vary greatly by state, and each state has its own tax rules and regulations. Taxes are an important factor in determining how much money you get to pocket on the income you earn. Colorado has a flat income tax rate for individual tax filers at 4.40%. There are no tax brackets for state taxes because there’s a flat tax rate for any income you make in the state.
Tax Facts
Different Types of State Taxes
Tax Rates for Colorado
State income tax
4.40%
Sales Tax
2.9%-8.3%
Property tax
0.55%
Estate Tax
$0
Tobacco tax
$1.94 per pack
Gasoline tax
$0.22 per gallon
Diesel tax
$0.205 per gallon
Who files income taxes in Colorado?
In Colorado, the amount of time you spend living in the state determines the type of resident category you fall into. You will need to file a Colorado state income tax return if you meet at least one of the requirements: Full-time resident: You’re a legal resident and spent the year as a resident, even if you left for a short period of time Part-time resident: A part of the tax year was spent as a resident Non-resident: You don’t live in the state but earn Colorado-source income, or you won a lottery from the state. Corporate entities: Any company that is based in Colorado or make a significant income from the state.
Taxes in Colorado
Income tax rates are relatively moderate in Colorado. A flat tax rate for single taxpayers means that you’ll pay 4.55% of any income that you make in the state no matter if you are single filer or a married couple filing jointly or a head of household. The flat tax rate of 4.55% does not apply to actual income, but the adjusted gross income or the income after all applicable deductions and exemptions have been subtracted.
Tax brackets for Colorado
Because of a flat income tax rate, there are no individual tax brackets in the state of Colorado. So instead of having different tax brackets for different amounts of income the state has one uniform tax rate for any sort of income.
Property taxes in Colorado
Owning a property comes with the responsibility of paying property taxes. Property taxes cover costs related to local school districts, police, fire department, parks, sewage systems and the upkeep of roads. In Colorado the property is at 0.55% of a property’s value.
Sales taxes in Colorado
Colorado charges a state-wise tax rate of 2.9%, which is relatively low. However, the district or county tax rates in Colorado are added to this rate and the combined taxes can be as high as 8.3%.
Other taxes in Colorado
There are a number of other taxes that a state can charge and Colorado is no different. The state charges taxes on inheritance, tobacco, gasoline and alcohol. The taxes and tax rates vary by state.
Estate taxes in Colorado
The state of Colorado does not charge a tax for estate or inheritance taxes. The state also doesn’t charge a tax on gifts.
Tobacco taxes in Colorado
The tobacco tax is levied in most states to discourage the number of people buying cigarettes. In Colorado, the tax rate is $1.94 per pack of 20 cigarettes. Cigars are taxed at 50% of the wholesale rate of a cigar and the same applies to the cost of chewing tobacco and smoking tobacco.
Gasoline taxes in Colorado
Colorado’s gasoline and diesel taxes are $0.22 per gallon for gasoline and $0.205 per gallon for diesel.
Alcohol taxes in Colorado
There are taxes levied on alcohol in an effort for states to raise capital and encourage individuals to lower their overall consumption. In Colorado, alcohol tax for beer is at $0.08 per gallon, tax for wine is $0.28 per liter and distilled spirits are taxed at $2.28 per liter.
