Top U.S. Cities for Self-Employed Professionals [Cost of Living + Tax Friendliness Ranking]

Being self-employed gives you the freedom to work from anywhere. But where you choose to live can have a major impact on your income, expenses, and long-term financial goals. From rising rent prices to the 15.3% self-employment tax most independent workers owe, location matters more than many realize.

To help you make a more informed move, we analyzed cost-of-living data from the U.S. Bureau of Economic Analysis and tax data based on IRS guidance. Our goal: find cities that are generally more affordable and tax-friendly for freelancers, contractors, and solo business owners in 2025.

This guide could help you narrow down your options. Below, we’ll walk through the ranking criteria and reveal 10 U.S. cities that might be worth considering for your self-employed lifestyle.

How We Chose the Best Cities for Self-Employed Workers

To create a fair and useful ranking, we focused on three key data points that directly impact freelancers, contractors, and small business owners. Each factor was chosen for its direct influence on everyday cost, tax exposure, and the local business environment.

✅ Cost of Living (Regional Price Parities)

We used the latest Regional Price Parities (RPPs) from the U.S. Bureau of Economic Analysis, released December 12, 2024. These figures show how much everyday expenses — like rent, groceries, and services — typically cost in each metro area. Lower RPP scores mean your money could go further.

✅ Tax Burden (State + Local Taxes)

We reviewed top state income-tax brackets, typical sales tax rates, and average property taxes to estimate overall tax impact. Base figures came from IRS guidance, including Schedule A rules and state and local tax (SALT) deduction limits. This gave us a combined view of how much tax might reduce your take-home pay — on top of the 15.3% federal self-employment tax.

✅ Self-Employment Rate

We used recent data from the Current Population Survey (via the Bureau of Labor Statistics) to measure the share of unincorporated self-employed workers in each metro. In the fourth quarter of 2023, the national average is about 5.7%. Cities with a higher rate may offer stronger local support for independent workers.

Each of these metrics was converted to a 0–100 scale, then given equal weight to create a final score across all 389 metropolitan areas.

Why These Factors Matter if You’re Self-Employed

Living expenses affect your bottom line immediately. 

✏️ Hypothetical Example: A freelance designer making $90,000 in a city with an RPP of 85 could have similar buying power as someone earning $106,000 in a higher-cost city. That difference can directly impact savings and investment goals.

Local and state taxes also add up quickly. Since you already owe 15.3% in federal self-employment tax, higher income or sales taxes can shrink your earnings even more. Knowing this ahead of time could help you avoid cash flow issues.

Finally, the share of self-employed workers in a city often signals how supportive the environment is. Higher rates often mean more co-working spaces, local business grants, or health insurance options designed for solo workers.

Top 10 U.S. Cities for Self-Employed Professionals in 2025

Where you live can shape how far your income stretches and how much of it you keep. For self-employed professionals, a city’s tax climate, cost of living, and sector-specific opportunities all play a role. The list below ranks 10 U.S. metro areas that stand out for affordability and tax efficiency in 2025.

Quick Comparison Table

Rank	City (MSA)	2023 Cost Index*	Tax Score†
1	San Antonio–New Braunfels, TX	93.7	100
2	Tulsa, OK	89.5	85
3	Nashville–Davidson–Murfreesboro–Franklin, TN	97.4	100
4	Austin–Round Rock–Georgetown, TX	97.6	100
5	Jacksonville, FL	99.2	100
6	Kansas City, MO-KS	93.3	85
7	Salt Lake City, UT	96.4	85
8	Raleigh–Cary, NC	98.0	85
9	Boise City, ID	93.4	75
10	Atlanta–Sandy Springs–Roswell, GA	100.9	75

* Cost Index = Regional Price Parities (All items, U.S. = 100)
† Tax Score (0–100) weights state personal income tax most heavily:
100 = no state income tax
85 = flat/low rate ≈ 4–5%
75 = flat/low-mid rate ≈ 5–6%

Sources: U.S. Bureau of Economic Analysis, Texas Comptroller of Public Accounts, revenue.support.tn.gov, Missouri Department of Revenue, Utah Legislature, NCDOR, Welcome to Oklahoma’s Official Web Site, Idaho State Tax Commission, Department of Revenue

What Stands Out in Each City

📝 Note: These profiles offer a practical shortlist for self-employed workers comparing tax rules, business opportunities, and cost of living—no need to dig through dozens of datasets or rankings.

What Else to Consider When Choosing a City

Is the Local Scene Aligned With Your Industry?

✅ Coworking spaces can signal opportunity. In 2025, there are more than 7,800 coworking spaces across the U.S. — a 25% increase from the previous year. Cities with large clusters like Austin, Nashville, and Atlanta often indicate strong freelance communities and built-in infrastructure for solo professionals.

✅ Check for local small business support. A city with active programs from the Small Business Administration (SBA) or its local Small Business Development Center (SBDC) can make a real difference. Events like pitch nights, mentoring sessions, and procurement fairs often reflect how supportive the local environment is for independent professionals.

✅ Match your industry to the city’s ecosystem. Tech entrepreneurs often benefit from hubs with regular investor meetups, while creatives may do better in cities with strong arts scenes or production incentives. Browse chamber of commerce events or business directories to see if your niche is already thriving there.

Don’t Overlook Healthcare and Insurance Costs

✅ Premiums vary by location. According to CMS, the national average premium for a 2025 benchmark silver health plan is $477 per month. But there’s a wide range: Florida remains under $420 on average, while New York exceeds $650. These differences can impact your overall monthly budget.

✅ Use the self-employed health insurance deduction. If you qualify, IRS Form 7206 allows you to deduct your health insurance premiums up to the amount of your net business profit. This reduces both your income tax and self-employment tax.

If you skip this deduction, you could end up losing the financial benefits of living in a lower-cost or lower-tax city.

Is the City Remote-Work Friendly?

✅ Internet speed matters more than skyline views. The FCC reports that the median advertised download speed in the U.S. is 467 Mbps, but some ZIP codes still fall below 100 Mbps. Before committing to a move, check your potential neighborhood on the FCC National Broadband Map.

✅ Availability doesn’t always mean affordability. The NTIA reports gaps between where service is available and where people actually subscribe. Factors like pricing, data caps, and provider options can affect how viable the connection is for full-time work.

✅ Look for remote-friendly amenities. Cities that invest in digital infrastructure—like public Wi-Fi zones, library fiber access, or programs such as Tulsa Remote—can make daily workflows smoother for remote workers and solo professionals.

Wrapping It Up

As you plan your next move, focus on three key factors—cost of living, tax impact, and professional support. To narrow your options:

✅ Compare your budget to Regional Price Parities and local tax rates using data from the BEA and IRS
✅ Look up SBA or SBDC event calendars to spot active business communities
✅ Check health insurance premiums by state on HealthCare.gov and see how much you can deduct using IRS Form 7206
✅ Use the FCC Broadband Map to confirm internet speeds, then research coworking spaces nearby

Taking time to research and visit your shortlist of cities can help you find a place that supports both your income and work-life balance.

📌 Ready to dive deeper? Explore our other guides for freelancers, business owners, and remote professionals:

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