No tax on wages or investment income
Tennessee doesn't tax wages, and its Hall income tax on interest and dividends was fully repealed for tax years beginning on or after January 1, 2021.
Tennessee tax guide
Tennessee taxes for self-employed workers in 2026
Tennessee doesn't tax wages, and how you've set up your business decides whether its franchise and excise tax applies.
Published by Cadus Labs LLC · Last updated November 9, 2026 · How we write these guides
Based on the Tennessee Department of Revenue's franchise and excise tax manual and other official state guidance.
Franchise and excise tax depends on your structure
Sole proprietorships fall outside franchise and excise tax, because they don't give their owners limited liability. Entities that do, such as LLCs, generally owe it, including a 6.5% excise tax on net earnings and a minimum franchise tax of $100.
Tennessee also has a separate business tax on gross receipts, along with local business licenses. Check with the Department of Revenue and your county clerk.
Your federal tax comes first
Wherever you live, self-employed income is subject to federal income tax and self-employment tax. A single filer with $60,000 of net profit and no other income owes about $12,037 in federal tax for 2026, or 20% of profit, before any state or local tax.
Federal estimated payments are due April 15, June 15, and September 15, 2026, and January 15, 2027. Use our 1099 tax calculator to run your own numbers.
Recordkeeping checklist
Set aside for federal tax from every payment you receive.
Make federal estimated payments if you expect to owe enough.
Keep receipts and a mileage log for everything you deduct.
Check Tennessee's business tax and your local license requirements.
Free tools for this
Calculator
1099 and Self-Employment Tax Calculator
Enter your 1099 income and business expenses to estimate self-employment tax, federal income tax, and what to set aside each quarter. No sign-up, and nothing you type is saved.
Calculator
Quarterly Tax Set-Aside Calculator
Turn expected profit into a practical tax savings target, then use Cadus to keep income, expenses, deductions, receipts, and reports organized.
Template
Quarterly Tax Savings Worksheet
Use this worksheet to turn expected monthly profit into a practical tax savings target before estimated tax due dates arrive.
Template
Business Expense Log Template
Copy this table to start organizing business purchases, receipt proof, categories, and business purpose before moving records into Cadus.
Official sources
Related guides
Self-employment tax guide
Self-Employment Tax
The self-employment tax rate is 15.3%. See who pays, how the 2026 wage base works, the deduction for half the tax, and a worked example.
Estimated tax guide
Quarterly Estimated Taxes
2026 estimated tax due dates, who has to pay, how to avoid the penalty, and a worked example for a self-employed worker earning $60,000.
Schedule C education
Schedule C Expense Categories
Every Schedule C expense line in plain English: what goes on each one, what doesn't, and the records to keep for self-employed workers.
Tennessee Taxes FAQ
Do sole proprietors pay Tennessee franchise and excise tax?
No. Sole proprietorships fall outside it because they don't provide limited liability protection.
Does Tennessee tax self-employment income?
Tennessee doesn't tax wages or individual earnings. You still owe federal tax, and business taxes may apply.
Cadus educational content is not tax, legal, or accounting advice. Tax rules can change, and individual facts matter. Review official guidance or speak with a qualified tax professional before filing.