Question 1

How much tax does a $200K freelancer pay?

Accepted Answer

A single $200K freelancer in a no-tax state pays roughly $60,000-$65,000 in total taxes (federal + SE). In California, this rises to $75,000-$80,000. The effective rate is approximately 30-40% depending on deductions and state.

Question 2

Is an S-Corp worth it at $200K freelance income?

Accepted Answer

Very likely yes. At $200K, S-Corp election can save $8,000-$15,000+ per year in self-employment tax. You'd pay yourself a reasonable salary (e.g., $100K) and take the remaining $100K as distributions not subject to SE tax. The savings far outweigh the $1,000-$3,000 annual cost of S-Corp compliance.

Question 3

What retirement accounts should a $200K freelancer use?

Accepted Answer

A Solo 401(k) allows up to $69,000 in total contributions (2026), combining employee deferrals ($23,500) and employer profit-sharing (25% of net income). This is more flexible than a SEP IRA and can include Roth contributions. At $200K, maxing this out could save $15,000-$20,000 in taxes.

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