2025 Tax Year

South Dakota Side Hustle Tax Calculator

South Dakota has no state income tax. Calculate your federal self-employment tax instantly.

SDNo state tax

920,000 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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Side Hustle Income *

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Excellent news for South Dakota side hustlers: Mount Rushmore State has no state income tax. Whether you're freelancing in Sioux Falls, running an online business from Rapid City, or driving for rideshare in Aberdeen, you won't owe any state income tax on your earnings. South Dakota is one of the most tax-friendly states for self-employed individuals.

South Dakota Tax Guide

How Side Hustle Taxes Work in South Dakota

South Dakota is one of nine states with no state income tax:

**What South Dakota side hustlers pay:** - **Federal self-employment tax**: 15.3% on net earnings - **Federal income tax**: 10% to 37% based on total income - **South Dakota state income tax**: $0

**Additional benefits:** - No corporate income tax - No personal property tax - No inheritance tax - State revenue comes from sales tax and other sources

Example

What South Dakota Side Hustlers Owe

Let's say you're a single filer in Sioux Falls with a $48,000 W-2 job and $14,000 in side hustle income from freelance writing, with $2,000 in business expenses.

**Your estimated taxes on the side hustle:** - Net self-employment income: $12,000 - Federal SE tax (15.3% of 92.35%): ~$1,697 - Federal income tax on side income: ~$2,640 (22% bracket) - South Dakota state tax: $0 - **Total additional tax: ~$4,337**

Compare this to neighboring Minnesota where you'd owe an additional ~$816 in state taxes.

Important Dates

South Dakota Tax Deadlines 2025

Since South Dakota has no state income tax, you only track federal deadlines: - **Q1**: April 15, 2025 - **Q2**: June 16, 2025 - **Q3**: September 15, 2025 - **Q4**: January 15, 2026

Use IRS Form 1040-ES for federal quarterly estimated payments.

Save Money

Common Deductions for South Dakota Freelancers

South Dakota side hustlers should maximize every federal deduction since there's no state income tax. **Home office deduction**: Claim dedicated space using simplified ($5/sq ft, max $1,500) or actual expense method. **Vehicle expenses**: 67 cents/mile for 2025; important for those serving clients in Sioux Falls, Rapid City, or across the state. **Equipment and supplies**: Computers, cameras, tools, and office supplies; Section 179 allows immediate expensing. **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 provide significant federal tax savings. **Marketing expenses**: Website costs, business cards, and promotional materials are deductible. **The 20% QBI deduction** is especially valuable with no state tax—every federal deduction provides your maximum savings. South Dakota's lack of income, corporate, and inheritance taxes makes it one of the most tax-friendly states overall.

Common Questions

South Dakota Side Hustle Tax FAQ

Does South Dakota have income tax on side hustles?

No, South Dakota has no state income tax at all. Your side hustle income is only subject to federal self-employment tax (15.3%) and federal income tax.

Do I need to file South Dakota state taxes?

No, since South Dakota has no state income tax, there's no state return to file. You only file federal taxes.

How does South Dakota compare to Minnesota?

South Dakota has a significant tax advantage. Minnesota's top rate is 9.85%, so South Dakota freelancers can save 6-10% on state taxes annually.

Do I need to register my side hustle in South Dakota?

Sole proprietors using their legal name don't need state registration. If using a trade name (DBA), register with the South Dakota Secretary of State. LLCs must register with the Secretary of State. Sellers may need a Sales Tax License.

Does South Dakota have any business taxes?

South Dakota has no personal income tax, no corporate income tax, and no business inventory tax. The main business tax is sales tax (4.5% state rate), which applies if you sell taxable goods.

Why do some freelancers move to South Dakota?

No income tax is the main reason. A freelancer earning $75,000 could save $5,000-$7,000 annually compared to living in a state like Minnesota or California. South Dakota also has a low cost of living.

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