Denver Freelancer Tax Guide: Colorado Flat Tax and TABOR Benefits for the Self-Employed

Denver\'s freelance scene is thriving, fueled by the city\'s outdoor lifestyle, growing tech sector, and Colorado\'s favorable 4.4% flat income tax rate. Self-employed professionals in the Mile High City also benefit from TABOR refunds — a unique Colorado mechanism that returns excess state revenue to taxpayers. Here is how to optimize your freelance finances in Denver.

Colorado\'s 4.4% Flat Tax for Freelancers

Colorado\'s flat rate means your state tax calculation is straightforward: 4.4% of your net self-employment income. On $100,000 of freelance profit, you owe $4,400 to Colorado. This is lower than most progressive-tax states and makes quarterly estimated payments easy to calculate.

Denver Occupational Privilege Tax

Self-employed individuals working in Denver must pay the Occupational Privilege Tax of $5.75 per month ($69 per year). While small, it is mandatory and must be filed monthly or quarterly with the Denver Department of Finance. Failure to register can result in penalties disproportionate to the tax amount.

TABOR Refunds for Self-Employed

Colorado\'s Taxpayer\'s Bill of Rights (TABOR) limits government revenue growth. When the state collects more than allowed, the excess is refunded. Recent TABOR refunds have ranged from $400 to $800 per person. As a freelancer filing Colorado taxes, you automatically qualify for these refunds.

Colorado Retirement Account Benefits

Colorado does not tax Social Security benefits and offers a retirement income subtraction for those 55 and older. For freelancers planning long-term, maximizing Solo 401(k) contributions now creates a tax-free income stream in retirement. Colorado\'s favorable retirement tax treatment makes Denver an excellent city for building a freelance career.