2025 Tax Year

Colorado Side Hustle Tax Calculator

Calculate your Colorado state tax (4.40%), federal tax, and self-employment tax on 1099 income.

CO4.40%

5.9 million residents

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2025 rates

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Last updated: January 2026 · Data from IRS Rev Proc 2024-40

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State

W-2 Income (from your day job)

Side Hustle Income *

Business Expenses (optional)

Colorado side hustlers enjoy a straightforward flat tax system with a competitive 4.4% state income tax rate for 2025. The Centennial State has no local income taxes, making tax planning simpler than neighboring states.

Colorado Tax Guide

How Side Hustle Taxes Work in Colorado

Colorado uses a simple flat tax system:

**Colorado state tax (2025):** - Flat rate: 4.40% on all taxable income - No brackets—everyone pays the same percentage

**No local income taxes:** - Denver and all Colorado cities have no income taxes - Colorado's TABOR makes adding new taxes difficult

Colorado's 4.4% is lower than California (9.3%+) and competitive in the region.

Example

What Colorado Side Hustlers Owe

Let's say you're a single filer in Denver with a $58,000 W-2 job and $16,000 in side hustle income from freelance photography, with $2,500 in business expenses.

**Your estimated taxes on the side hustle:** - Net self-employment income: $13,500 - Federal SE tax (15.3% of 92.35%): ~$1,909 - Federal income tax on side income: ~$2,970 (22% bracket) - Colorado state tax (4.4%): ~$594 - **Total additional tax: ~$5,473**

Important Dates

Colorado Tax Deadlines 2025

Colorado estimated tax deadlines: - **Q1**: April 15, 2025 - **Q2**: June 16, 2025 - **Q3**: September 15, 2025 - **Q4**: January 15, 2026

Use Form DR 0104EP for Colorado estimated tax payments.

Save Money

Common Deductions for Colorado Freelancers

Colorado freelancers benefit from straightforward conformity to federal taxable income—most federal deductions automatically reduce CO taxes. **Home office expenses**: Claim dedicated business space using simplified ($5/sq ft) or actual expense method. **Business vehicle mileage**: 67 cents/mile for 2025; important for those traveling to client sites in the Denver metro, Colorado Springs, or mountain communities. **Equipment and software**: Computers, cameras, tools, and business software; Colorado follows federal Section 179 treatment. **Professional services**: Accounting, legal, and tax preparation fees are fully deductible. **Health insurance premiums**: Self-employed individuals can deduct 100% of health, dental, and vision insurance. **Retirement contributions**: SEP-IRAs (up to 25% of net self-employment income) and Solo 401(k)s reduce both federal and Colorado taxable income. **Marketing expenses**: Website costs, business cards, and promotional materials are deductible. Colorado's flat 4.4% rate means every dollar of deductions saves you exactly 4.4% in state taxes plus your federal marginal rate. TABOR (Taxpayer's Bill of Rights) ensures the rate can't increase without voter approval, making Colorado's tax environment stable and predictable.

Common Questions

Colorado Side Hustle Tax FAQ

What is Colorado's tax rate on side hustle income?

Colorado has a flat 4.4% income tax rate on all taxable income including self-employment earnings. There are no local income taxes.

Does Denver have a city income tax?

No, Denver and all Colorado cities do not have local income taxes. You only pay the state 4.4% flat rate plus federal taxes.

Is Colorado's tax rate going down?

Colorado's rate has been reduced in recent years—from 4.55% in 2022 to 4.4% now. TABOR requires voter approval for tax increases.

Do I need to register my side hustle in Colorado?

Most businesses need to register with the Colorado Secretary of State for a Business ID. If using a trade name (DBA), file a Statement of Trade Name. LLCs must register with the Secretary of State. Sellers may need a Sales Tax License from the Department of Revenue.

Does Denver have an occupational privilege tax?

Yes, Denver and some other Colorado cities have an Occupational Privilege Tax (OPT)—a small monthly fee (typically $5-$10) for doing business in the city. This is a flat fee, not a percentage of income, so it's minimal for most side hustlers.

Can I deduct retirement contributions on Colorado taxes?

Yes, SEP-IRA and Solo 401(k) contributions reduce your federal taxable income, which Colorado uses as its starting point. Every dollar contributed saves you at your federal rate plus 4.4% in Colorado taxes.

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