Self-Employment Tax Information in New Hampshire
New Hampshire does not have a state income tax. However, self-employed individuals still need to pay federal self-employment tax. The self-employment tax rate is 15.3%, which includes 12.4% for Social Security tax and 2.9% for Medicare tax. The 15.3% tax rate applies to the first $147,000 of net earnings in 2022-2023. Self-employed individuals can deduct health insurance premiums and other business expenses to reduce their overall tax liability.
Deductions and Calculations
- To figure your net earnings, multiply your net business profit by 92.35 percent.
- You can deduct business expenses to reduce your taxable income.
- Some self-employed may owe local property taxes if the business owns property. Average property tax rate statewide is 1.86 percent. New Hampshire also charges a business profits tax on gross income over $92,000.
Tax Obligations and Savings for Self-Employed
- Self-employed should save 20-30 percent of earnings for federal taxes. This covers income and self-employment taxes owed.
- Can deduct half of self-employment tax on income taxes. Must pay self-employment taxes on earnings over $400.