2026 tax year · Michigan

Services and task work taxes in Michigan

TaskRabbit, Rover, Upwork and the rest report your gross and withhold nothing. The gap between that and what you are actually taxed on is mileage, in Michigan that gap is worth $2,304 in tax.

Take a driver who grossed $34,000 over 18,000 business miles. After mileage at 74.3 cents and the rest of the stack, worked through on the services and task work page $9,030 comes off and $24,970 is left as taxable profit. That profit is what Michigan and the IRS charge against.

What that leaves you owing in Michigan

Michigan taxes income at a flat 4.25% for 2026, applied on top of federal income tax and self-employment tax.

Self-employment tax$3,528
Federal income tax$568
Michigan income tax$986
Total tax$5,083
Effective rate on gross14.9%

Earning more in Michigan

A single filer taking the standard deduction, standard mileage method, this work as the only income, the calculator above handles the other filing statuses. Miles rise with earnings, so the deduction rises too, and the effective rate on gross climbs more slowly than it would for someone whose income grew without expenses attached:

VolumeGrossMileage offTaxable profitMichigan taxTotal taxRate on gross
Part-time $11,000 $1,485 $9,515 $376 $1,720 15.6%
Steady side income $34,000 $4,455 $29,545 $1,167 $6,250 18.4%
Full-time $55,000 $7,425 $47,575 $1,879 $11,052 20.1%

Switching state opens that state's page.

Enter your numbers and press Calculate to see your 2026 estimate.

Working across a Michigan line

Services income is sourced to where the work was physically done. A job over the line can create a filing obligation in that state even for a single afternoon, and reciprocity agreements do not help, they cover wages paid by an employer, not self-employment income.

On $24,970 of profit, what the states around Michigan would charge:

StateIts taxvs Michigan
Ohio $0 −$1,061
Indiana $737 −$325
Wisconsin $970 −$91

Services and task work tax questions in Michigan

How much should a Michigan contractor set aside?

About 14.9% of gross on the $34,000 example, $5,083 across self-employment tax, federal income tax and $986 to Michigan. Set aside from each payout rather than finding it in April.

Does the $34,000 on my 1099-NEC match what Michigan taxes?

No. Michigan taxes profit, not gross. After $9,030 of deductions the taxable figure is $24,970, so the Michigan bill is $986 rather than what gross alone would suggest.

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