Massachusetts taxes most income at a flat 5%, with an extra 4% surtax on very high incomes. For most freelancers the planning is straightforward — but the estimated-payment threshold is low.
What you pay on freelance profit
| Tax | Rate |
|---|---|
| Federal self-employment tax | 15.3% on 92.35% of profit |
| Federal income tax | 10%–37% |
| Massachusetts income tax | 5.00% for 2026 |
| Millionaires surtax | Extra 4% on taxable income above $1,107,750 (2026) |
The 5% rate and exemptions
Business profit is taxed at the same 5% as most other income in Massachusetts. Instead of a standard deduction, Massachusetts gives personal exemptions — $4,400 for a single filer, $8,800 for a married couple filing jointly and $6,800 for a head of household.
The 4% surtax
Since 2023, Massachusetts adds a 4% surtax on taxable income above an inflation-adjusted threshold. For 2026 that threshold is $1,107,750 (it was $1,083,150 in 2025). It only matters for very high earners, or in a year with a large one-off gain such as selling a business.
Estimated payments
You must make Massachusetts estimated payments (Form 1-ES) if you expect to owe more than $400 on income not subject to withholding — a threshold most freelancers cross quickly. 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.
If you have an LLC
Massachusetts LLCs file an annual report with the Secretary of the Commonwealth, and the fee is $500 — one of the higher LLC fees in the country. That cost is worth weighing before forming an LLC purely for appearances.
Watch for rate changes
A ballot question on the November 2026 ballot proposes lowering the Massachusetts income tax rate. Check the result before planning for 2027.
How much to set aside
Enter 5 in the state field of the tax set-aside calculator.