2025 Tax Year

Indiana Side Hustle Tax Calculator

Calculate your Indiana state tax (3%), federal tax, and self-employment tax on 1099 income.

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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)

Indiana side hustlers benefit from one of the nation's lowest flat state income tax rates at just 3.0% for 2025. However, nearly all 92 counties levy additional local income taxes ranging from 0.5% to 2.9%. You'll need to account for both state and county taxes on your self-employment income.

Indiana Tax Guide

How Side Hustle Taxes Work in Indiana

Indiana uses a flat state income tax combined with mandatory county income taxes:

**Indiana state tax:** - Flat rate: 3.0% on all adjusted gross income

**County income taxes (in addition to state):** - Marion County (Indianapolis): 2.02% - Lake County (Gary area): 1.5% - Allen County (Fort Wayne): 1.48% - Hamilton County (Carmel): 1.0%

**Combined rates:** - Indianapolis residents: 5.02% (3.0% + 2.02%) - Fort Wayne residents: 4.48% (3.0% + 1.48%)

Example

What Indiana Side Hustlers Owe

Let's say you're a single filer in Indianapolis with a $50,000 W-2 job and $12,000 in side hustle income from freelance design, with $1,500 in business expenses.

**Your estimated taxes on the side hustle:** - Net self-employment income: $10,500 - Federal SE tax (15.3% of 92.35%): ~$1,485 - Federal income tax on side income: ~$2,310 (22% bracket) - Indiana state tax (3.0%): ~$320 - Marion County tax (2.02%): ~$212 - **Total additional tax: ~$4,327**

Important Dates

Indiana Tax Deadlines 2025

Indiana estimated tax deadlines align with federal: - **Q1**: April 15, 2025 - **Q2**: June 16, 2025 - **Q3**: September 15, 2025 - **Q4**: January 15, 2026

Use Form ES-40 for Indiana estimated tax payments. County taxes are paid with state taxes.

Save Money

Common Deductions for Indiana Freelancers

Indiana freelancers can reduce both state and county taxes by maximizing deductions. **Home office expenses**: Claim dedicated business space using simplified ($5/sq ft) or actual expense method—deductions reduce both state and county tax liability. **Business mileage**: 67 cents/mile for 2025; important for rideshare drivers and anyone serving the Indianapolis, Fort Wayne, or Evansville markets. **Equipment and software**: Computers, cameras, tools, and business software; Indiana 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 insurance costs. **Retirement contributions**: SEP-IRAs and Solo 401(k)s reduce your federal AGI, which Indiana uses as its starting point—saving you at federal rate plus 3% state plus your county rate (up to 2.9%). **Marketing expenses**: Website costs, business cards, and promotional materials qualify. All Schedule C deductions flow through to reduce both your state and county tax liability. In Indianapolis, every dollar deducted saves you over 5% in combined state and local taxes.

Common Questions

Indiana Side Hustle Tax FAQ

Does Indiana have county income taxes?

Yes, Indiana has both a 3.0% state income tax AND county income taxes ranging from 0.5% to 2.9%. Indianapolis (Marion County) adds 2.02% for a combined rate of 5.02%.

How do I find my Indiana county tax rate?

Visit the Indiana Department of Revenue website. Your rate is based on your county of residence on January 1st of the tax year.

Do I file county taxes separately?

No, Indiana county taxes are calculated and paid with your state return using Form IT-40.

Do I need to register my side hustle in Indiana?

Sole proprietors using their legal name don't need state registration. If using a trade name (DBA), file an Assumed Business Name with the county recorder. LLCs must register with the Indiana Secretary of State. Sellers may need a Registered Retail Merchant Certificate.

When are Indiana quarterly estimated taxes due?

Indiana follows federal quarterly deadlines: April 15, June 16, September 15, and January 15. Use Form ES-40 for payments. County taxes are included with state estimated payments.

How do retirement contributions affect Indiana taxes?

SEP-IRA and Solo 401(k) contributions reduce your federal AGI, which Indiana uses as its starting point. This means retirement contributions reduce both state (3%) and county taxes (0.5-2.9%)—potentially saving you over 5% in combined state and local taxes.

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