Self-employed taxes and LLC costs in Minnesota, 2026
Minnesota has one of the highest top income tax rates in the country, and its brackets bite early for a single freelancer.
Total tax on this income in 2026
$21,648
Put aside 25% of each payment · $5,412 per quarter
| Self-employment tax (15.3%) | $12,010 |
| Federal income tax | $5,790 |
| Minnesota income tax | $3,848 |
| QBI deduction used | $12,579 |
| Effective rate on all income | 25.5% |
With an S corp election and a $34,000 salary, about $3,655 less tax (check it).
Computed by Radif Partners from IRS and Minnesota agency documents read on October 15, 2026 · How we calculate
Minnesota taxes 2026 income in four brackets, from 5.35 % to 9.85 %, after a $15,300 standard deduction for a single filer. The 7.85 % rate starts at $109,430 of taxable income and the top rate at $203,150. On $75,000 of self-employment profit, a single filer owes $3,216 to Minnesota and $18,711 with federal income tax and self-employment tax; on $200,000, the state share climbs to $11,759. Keeping an LLC costs nothing each year, since the annual renewal is free, though missing it leads to administrative dissolution. Minnesota follows the S election without an entity income tax for a small company, but larger S corporations and partnerships owe a minimum fee based on their Minnesota property, payroll and sales. At $120,000 of profit, the model shows $5,135 of S corp saving after $2,000 of payroll costs.
Minnesota at a glance, 2026
| LLC filing fee | $155 |
| Annual Renewal | $0 a year |
| Income tax | 5.35 % to 9.85 % |
| S corporation election | followed by the state |
| Tax on $75,000 of profit (single) | $18,711 in all, $3,216 to Minnesota |
Few states push a single filer into a rate near 8% as early as Minnesota does. The Department of Revenue's 2026 schedule puts the 7.85 % bracket at $109,430 of taxable income and the 9.85 % bracket at $203,150, while a married couple filing jointly reaches those rates at $193,480 and $337,930 (Minnesota Department of Revenue, 2026 brackets). For a self-employed person with a good year, the jump shows up in the quarterly payments as much as in the April bill.
State income tax on a freelance profit
Minnesota income tax
$4,164
| State share of profit | 4.6% |
| Total with federal | $23,480 |
Single and married at the same profit
The joint brackets are wider than the single ones, so marriage changes the Minnesota result more than in a flat-tax state. With $120,000 of profit, a single filer owes $6,060 and a couple with no other income $4,797. Half of self-employment tax and any SEP or solo 401(k) contribution reduce federal AGI, which is the starting point of the Minnesota calculation, so a retirement contribution saves at the state's marginal rate as well; the SEP IRA vs solo 401(k) page shows the ceilings.
An LLC with a free renewal
Minnesota charges a filing fee for Articles of Organization, and then nothing for the annual renewal, which must still be filed every calendar year by December 31 (Minnesota Secretary of State fee schedule). The fee schedule we could read dates from 2017 and the current online fee could not be confirmed, so we do not quote the formation amount; the statute sets the base fee (Minn. Stat. 322C.0201). An LLC that skips its renewal is administratively dissolved, which can cost far more than any fee. Because nothing is due each year, the long-run cost of a Minnesota LLC is the formation fee alone, a sharp contrast with neighbors that charge every year. The income tax result is the same with or without the LLC, since a one-owner LLC is disregarded and its profit is taxed on the owner's return.
Minimum fee and the PTE tax
S corporations and partnerships, multi-member LLCs included, pay a minimum fee once the total of their Minnesota property, payroll and sales passes a threshold, in tiers set by Minn. Stat. 290.0922 (Form M8 instructions). A one-person consultancy normally stays below it. The same instructions describe the elective pass-through entity tax, computed at 9.85% on the entity's income, with a credit for the owners. The S election guide covers the federal side.
Estimated payments are needed when tax after credits is expected to be $500 or more (Minn. Stat. 289A.25), on the federal schedule.
Minnesota income tax brackets
| Taxable income, single | Rate | Taxable income, joint | Rate |
|---|---|---|---|
| $0 to $33,310 | 5.35 % | $0 to $48,700 | 5.35 % |
| $33,310 to $109,430 | 6.8 % | $48,700 to $193,480 | 6.8 % |
| $109,430 to $203,150 | 7.85 % | $193,480 to $337,930 | 7.85 % |
| over $203,150 | 9.85 % | over $337,930 | 9.85 % |