Self-employed workers in Alaska pay both the employee and employer portions of Social Security and Medicare taxes (15.3% combined on the first $176,100 of net earnings). You can deduct 50% of SE tax from gross income before calculating income tax.
Alaska has no state income tax. Self-employed workers here pay only federal income tax plus SE tax. The effective total rate at $100K net profit is 26.4%, lower than most states.
Key deductions: 50% SE tax deduction, SEP-IRA (up to 25% of net profit, max $69,000), health insurance premiums, home office, business expenses. Maximizing deductions before calculating taxable income is the primary lever for self-employed workers.