Colorado has a flat 4.4% income tax and, unlike most states, starts from federal taxable income. In Denver and a few other cities there is also a small occupational privilege tax.
What you pay on freelance profit
| Tax | Rate |
|---|---|
| Federal self-employment tax | 15.3% on 92.35% of profit |
| Federal income tax | 10%–37% |
| Colorado income tax | Flat 4.4% |
| Denver occupational privilege tax | $4 a month for the self-employed |
Colorado’s 4.4% — starting from federal taxable income
Colorado’s rate is 4.4%. A temporary TABOR-triggered rate cut that has applied in some past years is not triggered for 2025 or 2026. Because Colorado starts from your federal taxable income, the federal standard deduction and the federal QBI deduction generally carry through — which lowers your Colorado tax. High earners (federal AGI above $500,000 single or $1,000,000 joint) must add back the QBI deduction.
Estimated payments
Make Colorado estimated payments (Form DR 0104EP) if you expect to owe more than $1,000 in net Colorado tax. Due dates match the IRS: April 15, June 15 and September 15, 2026, and January 15, 2027. Size the federal part with the quarterly estimated tax calculator.
Denver’s occupational privilege tax
Denver charges an occupational privilege tax (OPT). Self-employed owners and partners pay only the business portion: $4 per month ($48 a year) each, with no minimum earnings. You can pay annually by January 31. A few other Colorado cities have similar head taxes; check yours.
How much to set aside
Enter 4.4 in the state field of the tax set-aside calculator. Because Colorado starts from federal taxable income (after the standard and QBI deductions), your real Colorado cost on profit is lower than 4.4% at modest incomes.