Calculate your federal and state taxes on 1099 income. See your quarterly payment amounts, total tax burden, and estimated take-home pay as a 1099 contractor.
Invoicing, Tax & Tools
Bill clients, track time, and file taxes — software built for the self-employed
When a client pays you more than $600 in a year, they're required to send you a 1099-NEC form by January 31. This form reports your income to the IRS — and you're expected to have already paid taxes on it throughout the year via quarterly estimates.
The 1099 Tax Equation
1. Start with gross 1099 income 2. Subtract business expenses → net self-employment income 3. Calculate SE tax: net income × 92.35% × 15.3% 4. Deduct half of SE tax from AGI 5. Apply federal income tax brackets to adjusted gross income (after standard deduction) 6. Add state income tax 7. Divide total by 4 for quarterly payments
The Standard Deduction Reduces Your Income Tax
For 2026: $15,000 (single) or $30,000 (married filing jointly). This significantly reduces your federal income tax even before itemized deductions. Many 1099 contractors at moderate income levels pay very little federal income tax because their SE tax deduction + standard deduction wipes out most of the bracket exposure.
Why the "Set Aside 25-30%" Rule Works
For a single filer earning $75,000 in 1099 income with $5,000 in expenses (5% state tax): SE tax ≈ $9,891, federal income tax ≈ $5,926 (after standard deduction), state tax ≈ $3,253. Total: ~$19,070 on $75,000 = ~25.4% effective rate. Setting aside 30% gives a solid buffer for most situations.
Self-Employment Tax
The 15.3% US tax paid by freelancers covering both the employer and employee portions of Social Security and Medicare.
Quarterly Tax
Estimated tax payments made four times per year by freelancers to cover income and self-employment tax owed to the IRS.
Take-Home Pay
The net income a freelancer keeps after paying all taxes, business expenses, health insurance, and other deductions from gross revenue.
Net Income
A freelancer's total earnings after deducting all business expenses and taxes — the actual profit the business generates.
As a 1099 contractor, you pay 15.3% self-employment tax on 92.35% of your net earnings (after business expenses). This covers Social Security (12.4%) and Medicare (2.9%). You can deduct half of SE tax from your adjusted gross income, which partially offsets the burden.
With a W-2 job, your employer pays half of Social Security and Medicare (7.65%). As a 1099 contractor, you pay both halves yourself — that's the 15.3% SE tax. You do get to deduct business expenses and half of SE tax, which W-2 employees mostly cannot. Overall, 1099 income typically has a higher effective tax rate unless you have significant deductions.
Yes. If you expect to owe $1,000 or more in federal taxes for the year, the IRS requires you to make quarterly estimated payments. The due dates are April 15, June 15, September 15, and January 15 (shifting to the next business day if a date falls on a weekend or holiday). Missing these results in an underpayment penalty (currently ~8% annualized on the shortfall).
Common 1099 deductions: home office (dedicated workspace), internet (business portion), phone (business portion), software subscriptions, equipment (Section 179 expensing), professional development, health insurance premiums, retirement contributions (SEP-IRA, Solo 401k), travel for business, and professional services fees.
Yes. A common rule of thumb: set aside 25-30% of every 1099 payment into a separate tax account. Pay quarterly estimates from this account. At the end of the year, the account usually has a small surplus after your actual tax bill — which becomes a buffer for next year.
Self-Employment Tax Calculator
Estimate your self-employment tax (SE tax), federal income tax, and total tax bill as a freelancer or independent contractor.
Quarterly Tax Calculator
Calculate how much to pay in quarterly estimated taxes to avoid IRS underpayment penalties as a freelancer.
Tax Deduction Calculator
Calculate your freelance tax deductions and see how much you can save. Enter your home office, internet, software, equipment, and other expenses to estimate your deductible amount.