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
$
Hawaii 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 Hawaii, 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 Hawaii
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. The progressive income tax rates in Hawaii range from 1.4% to 11%. The state also has a separate corporate tax rate ranging from 1% to 6.5%. Your tax bracket determines the rate you will pay on your taxable income.
Tax Facts
Different Types of State Taxes
Tax Rates for Hawaii
State income tax
1.4%-11%
Sales Tax
4% to 4.5%
Property tax
0.62% of the property’s value
Estate Tax
0% up to $5.49 million
Tobacco tax
$3.20 per pack
Gasoline tax
$0.16 per gallon
Diesel tax
$0.16 per gallon
Who files income taxes in Hawaii?
In Hawaii, 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 Hawaii 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 Hawaii-source income, or you won a lottery from the state. Corporate entities: Any company that is based in Hawaii or makes a significant income from the state.
Taxes in Hawaii
Income tax rates are relatively moderate in Hawaii, and you’ll reach the highest tax bracket once you start making any income in the state. The tax rates do 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 Hawaii
Tax brackets function under a progressive tax system. The more money you make, the higher your tax bracket. Here are Hawaii's state income tax rates for the 2022 tax year for single filers: ->1.4% on the first $2,400 taxable income ->3.2% when the income is between $2,401 and $4,800 ->5.5% when the income is between $4,801 and $9,600 ->6.4% on taxable income over $9,601 and $14,400 ->6.8% on taxable income over $14,401 and $19,200 ->7.2% on taxable income over $19,201 and $24,000 ->7.6% on taxable income over $24,001 and $36,000 ->7.9% on taxable income over $36,001 and $48,000 ->8.25% on taxable income over $48,001 and $150,000 ->9% on taxable income over $150,001 and $175,000 ->10% on taxable income over $175,001 and $200,000 ->11% on taxable income over $200,001
Property taxes in Hawaii
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 Hawaii there’s no flat property tax rate. Instead, the counties impose their own property taxes based on individual cases. The tax rate depends on where your property lies in the state. A county tax assessor is a government appointed individual that survey’s your property and calculates the property tax in Hawaii. The rate is a percentage of the total value of the property and varies depending on the county or municipality of the property. Hawaii also has several exemptions in place for senior citizens homeowners, property tax credits for taxpayers with disabilities and other homestead exemptions.
Sales taxes in Hawaii
Hawaii charges a state-wise tax rate of 4%, which is relatively low. Sales tax is also known as general excise tax (GET) in Hawaii. The district or county tax rates in Hawaii are added to this rate and the combined taxes can be as high as 4.5%. This is because counties and districts can add up to 5.5% sales tax depending on individual cases.
Other taxes in Hawaii
There are a number of other taxes that a state can charge and Hawaii is no different. The state charges taxes on inheritance, tobacco, gasoline and alcohol. The taxes and tax rates vary by state.
Estate taxes in Hawaii
The state of Hawaii has a tax rate between 10% to 20%. But this tax rate only applies for properties that exceed $5.49 million. The state does charge tax on certain non-lineale inheritance. For example, when the property goes to a nephew.
Tobacco taxes in Hawaii
The tobacco tax is levied in most states to discourage the number of people buying cigarettes. In Hawaii, the tax rate is $1.20 per pack of 20 cigarettes. Cigars are taxed at 50% on wholesalers’ cost. The tax rates for chewing tobacco and smoking tobacco are also 50% on the whole seller's cost.
Gasoline taxes in Hawaii
Hawaii’s gasoline and diesel taxes are $0.16 per gallon for gasoline and $0.16 per gallon for diesel.
Alcohol taxes in Hawaii
There are taxes levied on alcohol in an effort for states to raise capital and encourage individuals to lower their overall consumption. In Hawaii, alcohol tax for beer is at $0.93 per gallon, tax for wine is $3.30 per gallon and distilled spirits are taxed at $5.98 per gallon.
