Have a Tax Question? Ask a Tax Expert
Hello there, this is a very good question.
If you normally file jointly, then in short, a business loss (if your expenses are more than your business income) will increase your refund, and a net profit will decrease your refund.
On any net profit, you will be paying ordinary income tax rates for federal and state, plus you will pay 15.3% self-employment tax.
A lot of people start a home business or "side business" and then give up when they realize how much they have to pay in taxes----however, additional income is almost always better than none at all.
If you have a net profit, you may wish to prepare your state and federal returns both separately and jointly, to see which yields the lowest tax liability. However, it is generally better to file married joinlty.
I am linking you to some information from the IRS for self-employed persons:
Here you will find information about legitimate business expenses, estimated tax payments, filing requirement, etc. It is a goldmine of information that every self-employed person should use as a reference.
Please let me know if you need any clarification.