Alabama Side Hustle Tax Calculator
Calculate your Alabama state tax (5%), federal tax, and self-employment tax on 1099 income.
Last updated: January 2026 · Data from IRS Rev Proc 2024-40
Alabama side hustlers face a moderate tax burden with progressive state income tax rates that top out at 5%. The Heart of Dixie offers a relatively affordable cost of living and tax-friendly environment for freelancers. While Birmingham, Huntsville, and other cities have occupational taxes on wages, self-employment income is generally taxed only at the state level.
How Side Hustle Taxes Work in Alabama
Alabama uses a progressive income tax system with three brackets:
**Alabama state tax rates (2025):** - 2% on income up to $500 (single) - 4% on $501 - $3,000 - 5% on income over $3,000
**Local occupational taxes:** - Birmingham and some cities have occupational taxes (1-2%) - These primarily apply to W-2 wages, not self-employment income - Most freelancers only pay the state 5% rate
Alabama's rates are competitive for the Southeast, though higher than Tennessee (0%) or Florida (0%).
What Alabama Side Hustlers Owe
Let's say you're a single filer in Birmingham with a $45,000 W-2 job and $12,000 in side hustle income from freelance writing, with $1,500 in business expenses.
**Your estimated taxes on the side hustle:** - Net self-employment income: $10,500 - Federal SE tax (15.3% of 92.35%): ~$1,485 - Federal income tax on side income: ~$2,310 (22% bracket) - Alabama state tax (5%): ~$525 - **Total additional tax: ~$4,320**
Your effective rate on the side hustle is approximately 41%.
Alabama Tax Deadlines 2025
Alabama estimated tax deadlines: - **Q1**: April 15, 2025 - **Q2**: June 15, 2025 - **Q3**: September 15, 2025 - **Q4**: January 15, 2026
Use Alabama Form 40ES for state estimated tax payments.
Common Deductions for Alabama Freelancers
Common deductions for Alabama freelancers include: - Home office expenses - Business mileage (67 cents/mile for 2025) - Equipment and supplies - Professional services - Alabama has its own deduction rules—federal standard deduction doesn't apply directly
Alabama Side Hustle Tax FAQ
What is Alabama's tax rate on side hustle income?
Alabama has progressive rates from 2% to 5%, with the top 5% rate applying to all income over $3,000. Most side hustlers pay the full 5% rate.
Does Birmingham have a tax on freelance income?
Birmingham has an occupational tax, but it primarily applies to W-2 wages. Self-employment income is generally only subject to the state 5% rate.
How does Alabama compare to neighboring states?
Alabama's 5% top rate is higher than Florida (0%) and Tennessee (0%), but lower than Georgia (5.39%) and Mississippi (5%).
Related State Calculators
Compare Alabama's 5% rate with these other states popular with freelancers and gig workers.
Return to main calculator to compare all 50 states
Side Hustle Calculators by State
All 50 states plus DC available. Return to main calculator or select a state above.
Ready to calculate your taxes?
This calculator provides estimates only. For personalized advice, consult a qualified tax professional.
Calculate My Alabama Taxes ↑