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Step One: Calculate Your After_Tax Income. Your after_tax income is what remains of your paycheck after taxes are taken out, such as state tax, local tax, income tax, Medicare, and Social Security. If you're an employee with a steady paycheck, your after_tax income should be easy to figure out. Look at your paystubs. If health care, retirement contributions, or any other deductions are taken out of your paycheck, add them back in.

Just remember that being self_employed means that you must also pay the self_employment tax, so include this in your calculations. The self_employment tax is double what you would pay in Medicare and Social Security taxes if you were employed.

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