The small business tax map: where America's self-employed file

What the IRS data shows

Self-employment is most common in the Southeast and in South Florida, but the biggest average profits are in New England and around Nashville. More filers does not mean more money per filer.

1. Miami is the side business capital of the country. 35.6 percent of returns in the Miami-Fort Lauderdale-West Palm Beach metro report Schedule C income, the highest of the 51 metros with 500,000 or more returns and nearly double the US rate of 19.2 percent. In Miami-Dade County it is 41.5 percent, the highest of the 326 counties with 100,000 or more returns. Miami also leads large metros in partnership and S corp income, at 11.8 percent of returns. IRS SOI metro and county data, tax year 2023.
2. Georgia has the most self-employed filers and the smallest average profit. 26.1 percent of Georgia returns report Schedule C income, the highest of the 50 states and DC, followed by Florida (25.6 percent) and Texas (24.4 percent). Yet Georgia's average Schedule C net income is $4,627, the lowest in the nation and about a third of the US average of $12,692. IRS SOI state data, tax year 2023.
3. The money is in New England and Nashville. New Hampshire has the highest average Schedule C income of any state at $29,913, ahead of Connecticut ($22,865) and Massachusetts ($22,128). Among large metros, Nashville leads at $28,562, and its suburb Williamson County, Tennessee averages $50,562, the highest of any large county. IRS SOI state, metro and county data, tax year 2023.

Growth was uneven. From 2022 to 2023 the number of returns with Schedule C income rose 1.1 percent nationally. Colorado grew fastest (4.2 percent), followed by Connecticut (3.6 percent) and Florida (3.2 percent), while Louisiana (down 1.2 percent) and Georgia (down 1.2 percent) shrank. Pass-through ownership is most common in the Mountain West: Montana (9.6 percent of returns), Utah (9.5 percent) and Wyoming (9.3 percent) lead the country in partnership and S corp income, against 6.0 percent nationally. IRS SOI state data, tax years 2022 and 2023.

State rankings

All 50 states and the District of Columbia. Click a column to sort.

Source: IRS Statistics of Income, Historic Table 2 (state data), tax years 2022 and 2023. Calculations by Next Level CPA.

Large metro rankings

The 51 metropolitan areas with 500,000 or more individual returns in tax year 2023.

Source: IRS Statistics of Income, county data 2023 (metropolitan and micropolitan area file). Calculations by Next Level CPA.

North and South Carolina

Both Carolinas sit right around the national average. North Carolina ranks 11th for the share of returns with Schedule C income (19.5 percent) and South Carolina ranks 13th (19.3 percent). Average Schedule C income is $11,502 in North Carolina and $10,263 in South Carolina, both below the US average of $12,692. IRS SOI state data, tax year 2023.

The Charlotte metro runs above the national rate at 21.0 percent, and Mecklenburg County is at 23.7 percent. Dare County on the Outer Banks has the highest share of any Carolina county with 20,000 or more returns, at 25.6 percent. IRS SOI county and metro data, tax year 2023.

ZIP code highlights

ZIP code data is published a year behind, so these figures are tax year 2022. Only ZIP codes with 5,000 or more returns are ranked.

Source: IRS Statistics of Income, ZIP code data, tax year 2022. ZIP 27608 also has the highest share of returns with partnership or S corp income among ranked Carolina ZIPs, at 24.7 percent.

Look up a county

Covers the 326 US counties with 100,000 or more returns, plus every North and South Carolina county with 20,000 or more. The full county file is in the downloads below.

Source: IRS Statistics of Income, county data, tax year 2023.

What this means if you are self-employed

Schedule C profit is hit twice: income tax and a 15.3 percent self-employment tax on most of the net. Once a business is steadily profitable, the structure of the business and quarterly estimates usually matter more than any one deduction.

Nationally, the average return that owed self-employment tax in 2023 paid $3,702 of it, on top of income tax. That is the cost an S corp election with a reasonable salary is meant to reduce for owners with enough profit, and the reason a Solo 401(k) can be worth setting up before year end. Whether either fits depends on your numbers.

Methodology

All figures come from published IRS Statistics of Income (SOI) individual income tax tables. We did not adjust, model or estimate any value. Money amounts in the IRS files are in thousands of dollars and were converted to dollars.

• Schedule C share is returns with business or professional net income or loss (field N00900) divided by all returns (N1).
• Average Schedule C income is total business or professional net income less loss (A00900) divided by the number of those returns (N00900). Losses pull the average down.
• Average self-employment tax is total self-employment tax (A09400) divided by returns with self-employment tax (N09400).
• Pass-through share is returns with partnership or S corp net income or loss from Schedule E (N26270) divided by all returns.
• Growth is the percent change in N00900 between the tax year 2022 and tax year 2023 state files.
• Size cutoffs: metros with 500,000 or more returns, counties with 100,000 or more (20,000 or more in NC and SC), ZIP codes with 5,000 or more. Rankings cover the 50 states and DC; Puerto Rico and the IRS "other areas" row are excluded.

Limits: the IRS assigns returns by the address on the return, which may differ from where the business operates. County, metro and ZIP files exclude some returns for disclosure protection, so their totals can differ slightly from state totals. Metro boundaries follow the IRS 2023 file. A Schedule C count is not a count of businesses: one return can include more than one Schedule C, and many people with a Schedule C also have a W-2 job.

Sources

• IRS, SOI Tax Stats, Historic Table 2 (state data, files 23in55cmcsv.csv and 22in55cmcsv.csv)
• IRS, SOI Tax Stats, County Data 2023 (files 23incyallnoagi.csv and 23incbsa.csv)
• IRS, SOI Tax Stats, Individual Income Tax Statistics, 2022 ZIP Code Data (file 22zpallnoagi.csv)

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Download the data

• states-2023.csv: all 50 states, DC and the US total, with 2022 comparison
• metros-2023.csv: every metropolitan area in the IRS file
• counties-2023.csv: every county in the IRS file
• nc-sc-zips-2022.csv: North and South Carolina ZIP codes, tax year 2022

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