Comparison•2025 Tax Year•Last verified: January 2026
California vs Florida: Side Hustle Tax Comparison 2025
Compare California and Florida taxes for freelancers and gig workers. Florida has no state income tax vs California's up to 13.3% - see your potential savings.
California and Florida represent two fundamentally different approaches to taxation, lifestyle, and governance. For side hustlers, the tax difference is dramatic: California has the highest state income tax in the nation (up to 13.3%), while Florida has no state income tax at all.
With remote work becoming normalized, many Californians are asking whether the Florida lifestyle—beaches, no income tax, lower cost of living—might be worth the move. This guide breaks down exactly what you'd save and what you'd trade off.
**Why This Comparison Matters:**
California to Florida migration has accelerated significantly:
- **Zero vs 13.3%**: Florida's no income tax vs California's nation-leading rates
- **Remote work enabler**: Tech workers can now work from anywhere
- **Cost of living**: Florida is significantly cheaper than CA coastal cities
- **Weather trade-off**: Both have warm weather, different styles
- **Political climate**: Some migrants cite governance differences
For side hustlers earning $20,000-$50,000 in freelance income, moving from California to Florida could mean keeping $1,800-$4,500 more per year in state tax savings alone.
Side-by-Side Tax Comparison
| Metric | California | Florida |
|---|---|---|
| State Income Tax Rate | 1% - 13.3% (progressive) | 0% (no income tax) |
| Common Rate for Side Hustlers | 6% - 9.3% | 0% |
| State Tax Filing Required | Yes (Form 540) | No |
| Federal SE Tax | 15.3% | 15.3% |
| Est. Tax on $20K Side Hustle* | ~$9,086 | ~$7,226 |
| Annual Savings (FL vs CA)* | — | ~$1,860 |
| Property Tax (Avg Rate) | 0.71% | 0.91% |
| Sales Tax (State + Avg Local) | 8.82% | 7.01% |
| Homeowner's Insurance (Avg) | ~$1,200/year | ~$4,200/year |
*Assumes single filer with $60,000 W-2 income + $15,000 net side hustle income. Actual taxes vary based on deductions, filing status, and total income.
California Analysis
**California Tax Analysis for Side Hustlers**
California's progressive tax system has the highest top rate in the nation, and side hustlers feel it acutely as freelance income stacks on top of W-2 wages.
**Key California Tax Facts (2025):**
- **Tax Type**: Progressive (9 brackets)
- **Rate Range**: 1% to 13.3%
- **Common Side Hustler Rate**: 6% to 9.3%
- **Mental Health Services Tax**: Additional 1% over $1 million
- **Filing Threshold**: $20,913 (single)
**Example**: If you earn $65,000 from your W-2 job and $20,000 from side hustle income (net of expenses) in California:
- Federal SE Tax: ~$2,826
- Federal Income Tax on side income: ~$4,400
- California State Tax: ~$1,860
- **Total Tax on Side Hustle: ~$9,086** (45.4% effective rate)
California offers unmatched tech ecosystem access, entertainment industry proximity, and coastal lifestyle—but the tax cost is substantial.
Florida Analysis
**Florida Tax Analysis for Side Hustlers**
Florida is one of nine states with no state income tax, making it a premier destination for tax-conscious freelancers and remote workers.
**Key Florida Tax Facts (2025):**
- **State Income Tax**: 0%
- **Tax Type**: None
- **Filing Requirement**: No state income tax return required
- **Corporate Tax**: 5.5% on C-corps only (not sole proprietors)
**Example**: Same scenario—$65,000 W-2 job and $20,000 from side hustle income (net of expenses) in Florida:
- Federal SE Tax: ~$2,826
- Federal Income Tax on side income: ~$4,400
- Florida State Tax: $0
- **Total Tax on Side Hustle: ~$7,226** (36.1% effective rate)
**Savings vs California: ~$1,860/year** on $20,000 of side hustle income.
Florida's trade-offs include hurricane risk (and associated insurance costs), humidity, and a less developed tech ecosystem compared to the Bay Area.
Calculate Your Side Hustle Taxes
Use our calculator to see exactly what you'd owe in each state. Try entering your numbers, then switch between California and Florida to compare.
Which State Is Right for Your Side Hustle?
**California May Be Better If You:**
- Work in tech and need Bay Area access
- Work in entertainment and need LA proximity
- Value California's diverse geography (beaches, mountains, desert)
- Have Prop 13 protected property with low tax basis
- Have deep professional networks in California
**Florida May Be Better If You:**
- Work remotely with no location dependency
- Prioritize keeping more of your side hustle income
- Are comfortable with subtropical climate and hurricane season
- Want lower overall cost of living
- Are building a new professional network anyway
**Important Considerations:**
1. **California audit risk**: CA's Franchise Tax Board aggressively audits former residents. Establish genuine Florida residency—don't maintain a CA apartment or return frequently.
2. **Homeowner's insurance**: Florida has the highest homeowner's insurance rates in the nation due to hurricanes. This can add $3,000+ per year compared to California.
3. **Tech ecosystem difference**: The Bay Area's tech ecosystem is unmatched. Miami's tech scene is growing but much smaller. Factor in career opportunity costs.
4. **Different lifestyle**: CA offers mountains, wine country, and varied climate. FL offers beaches, boating, and consistent warmth. Visit extensively before deciding.
5. **No state income tax audit**: Once you're a Florida resident, there's no state income tax to audit. This simplifies your tax life significantly.
Frequently Asked Questions
How much will I save moving from California to Florida for my side hustle?
Savings depend on your income level and tax bracket. On $20,000 of net side hustle income, you could save approximately $1,500-$2,000 per year in state taxes. On $50,000 of freelance income, savings could exceed $4,500 per year. Over 5 years, that's potentially $7,500-$22,500+ in your pocket.
Will California tax me after I move to Florida?
California can tax income earned while you were a CA resident, but once you establish genuine Florida residency, your income earned in Florida is not subject to CA tax. The key is genuinely relocating: update your driver's license, register to vote, change professional licenses, and don't maintain a CA residence. CA's FTB does audit former residents.
Is Florida's higher insurance cost worth the tax savings?
It depends on your income. If your side hustle income is $30,000+, the $2,000-$3,000 extra in homeowner's insurance is likely offset by $2,700-$4,500+ in state income tax savings. For lower earners, the math is closer. Renters avoid the insurance issue entirely and keep full tax savings.
Related Comparisons
Sources
- • California Franchise Tax Board - 2025 Tax Rates
- • Florida Department of Revenue
- • IRS Publication 334 - Tax Guide for Small Business
- • Tax Foundation - State Tax Data 2025
- • Insurance Information Institute - Homeowner's Insurance Data