Colorado Freelance Tax Calculator: 4.4% Flat Tax + SE Tax (2026)

A simple state layer on top of the federal bill

Colorado is one of the easier states to freelance in from a tax point of view. There are no brackets to memorise: one flat rate applied to the same taxable income you already calculated for the IRS.

That simplicity is also the catch. Because the state number is small and automatic, Colorado freelancers often forget to make state estimated payments and end up with penalties despite a modest bill.

This guide walks the full bill in five steps, traces a Denver consultant from $117,000 of revenue to a roughly $25,560 bill, and shows five profit levels. Figures are planning estimates, not filing advice.

How to calculate your Colorado freelance tax in 5 steps

1. 01

   Start from net profit, not what clients paid

   Every tax on this page is worked out on profit. Take gross receipts and subtract every legitimate business cost — software, equipment, a home office, a share of phone and internet, mileage and the health premiums you pay yourself. A Denver freelancer with $117,000 of revenue and $17,000 of expenses is taxed on $100,000. Getting this number right is the biggest single lever on the whole bill.

2. 02

   Apply the 15.3% self-employment tax

   Every US freelancer owes 15.3% self-employment tax on 92.35% of net profit — the Social Security and Medicare an employer would normally split with you. On $100,000 of profit that is $14,130, before any state gets involved. Half of it is deductible against federal income tax, which is why it shows up again in the next step.

3. 03

   Work out federal income tax after freelancer deductions

   Federal income tax applies to profit minus the deductible half of self-employment tax, the standard deduction ($15,000 for single filers in 2025) and the 20% qualified business income deduction. On $100,000 of profit that leaves roughly $62,000 of taxable income and a federal bill of about $8,630 — far less than simply multiplying profit by 22%.

4. 04

   Apply Colorado's flat 4.4% to federal taxable income

   Colorado starts from your federal taxable income, so the half-SE deduction, standard deduction and QBI deduction all reduce your state tax too. Apply the flat rate — 4.4% in recent years, temporarily lowered in some years when state revenue exceeds its TABOR limit. On about $62,000 of federal taxable income that is roughly $2,730. Denver adds a small occupational privilege tax of $5.75 a month once you earn $500 in a month there; Aurora, Greenwood Village and a few others have similar flat taxes.

5. 05

   Pay estimates four times a year

   Nothing is withheld from freelance income, so the IRS expects quarterly estimated payments on April 15, June 15, September 15 and January 15. Colorado estimates use the same four dates on Form DR 0104EP if you expect to owe more than $1,000 of state tax. Paying 100% of last year's total tax across the four quarters (110% if income was above $150,000) keeps you clear of underpayment penalties even when this year turns out bigger.

A worked example: $100,000 of profit in Denver

A single filer, no S-corp, standard deduction. Colorado adds about $2,700 — far less than most people guess.

Colorado freelance tax at five profit levels

Federal SE and income tax plus Colorado's 4.4% flat tax for a single filer. Local occupational privilege taxes excluded. Planning estimates — check the current Colorado rate each year.

Eight signs your Colorado tax plan has a gap

Colorado's tax is simple, which is exactly why people forget to plan for it.

• !You never make Colorado estimated payments
• !You applied 4.4% to profit instead of federal taxable income
• !You did not know Denver has an occupational privilege tax
• !You assumed last year's rate still applies
• !You moved to Colorado mid-year and filed as a full-year resident
• !Your health premiums are not counted as a deductible cost
• !You never looked at the FAMLI opt-in for the self-employed
• !Your tax reserve sits in your everyday account

Why federal deductions count twice in Colorado

Colorado's starting point is your federal taxable income. Every deduction that lowers it — the half-SE deduction, the standard deduction, QBI, health premiums and retirement contributions — also lowers your Colorado tax.

So a $6,000 SEP-IRA contribution saves roughly $1,300 of federal tax and another $260 in Colorado. Small, but it adds up across a career.

It also means Colorado tax tracks your federal planning closely. Get the federal number right and the state number follows.

Local taxes worth knowing

Denver's occupational privilege tax is tiny — $69 a year — but it requires registration, and unpaid OPT accrues penalties.

Aurora, Greenwood Village and Sheridan have similar flat head taxes. Elsewhere, Colorado cities do not tax income.

If you sell products, Colorado's home-rule cities run their own sales tax systems, which is far more complex than the income side.

Turning the bill into a habit

Move 22% to 28% of each payment into a tax account. Split roughly 23% for federal and 3% to 4% for Colorado, and pay both sets of estimates on the same four dates.

Price the full bill into your rate. A Colorado gross-up adds only about 3 points over a no-income-tax state, so it rarely changes your quote much.

Frequently asked questions