Tennessee Ranks Third in Self-Employment Taxes
New analysis of IRS data shows Tennessee self-employed filers paid among the highest average self-employment taxes in the nation.
Updated on Nov. 7, 2026 in Taxes
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J David Tax Law released an analysis of IRS data finding Tennessee ranks third nationally in average self-employment tax paid per filer. The average Tennessee self-employed worker paid $4,774.93, with 506,170 filers reporting self-employment tax obligations.
Why it matters
Self-employed individuals pay both the employee and employer portions of Social Security and Medicare taxes, a combined 15.3% of net earnings. Tennessee's ranking reflects the tax burden that falls on self-employed workers across the state.
Tennessee self-employed workers contributed more than $2.4 billion in self-employment taxes across 506,170 filers, about 15.5% of all state returns. The analysis does not break down how much of the average reflects income levels versus filer counts by industry.
The players
J David Tax Law
A tax law firm that conducted the analysis of IRS self-employment tax data by state.
Internal Revenue Service
The federal agency responsible for collecting federal taxes, including self-employment taxes under the Social Security and Medicare system.
The details
J David Tax Law used the latest IRS Statistics of Income data to rank states by average self-employment tax per filer. Tennessee's ranking is largely tied to relatively strong self-employment income levels reported throughout the state, though the study does not quantify that link further.
Timeline
- Latest IRS Statistics of Income data used as the study's source
- November 7, 2026: Article reporting the study findings published
Market Dynamics
The 15.3% combined Social Security and Medicare rate on self-employment income is set by federal payroll tax law, which applies to self-employed filers in every state. Tennessee's higher-than-average burden reflects where that fixed rate meets stronger reported self-employment earnings.
Self-employed Tennesseans owe both the employee and employer portions of Social Security and Medicare taxes, so the 15.3% combined rate applies directly to net earnings. Workers who report self-employment income should account for this obligation when setting aside money for quarterly tax payments.
The takeaway
Self-employed workers in Tennessee and nationwide pay both halves of payroll taxes, so setting aside a portion of each payment for taxes can prevent surprises at filing time. Reviewing the IRS Statistics of Income data directly can help filers compare their own obligations to state and national averages.
Further reading
Explore more on Tennessee Taxes to see how self-employment obligations compare across the state.
Source note: This article includes information reported by WGNSRadio.
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