1099 Tax Calculator

As a 1099 independent contractor, you pay both self-employment tax (15.3%) and standard federal income tax (ranging from 10% to 37% depending on your bracket). Your total 'tax rate' is a combination of these two, minus any deductions.

The self-employment tax is 15.3% of your net business earnings. It consists of two parts: 12.4% for Social Security and 2.9% for Medicare. When you are a W-2 employee, your employer pays half of this. As a 1099 contractor, you are responsible for the entire amount.

The US tax system is 'pay-as-you-go'. Since 1099 workers don't have taxes automatically withheld from their paychecks, the IRS requires you to make four estimated tax payments throughout the year (April, June, September, and January).

The Qualified Business Income (QBI) deduction, also known as Section 199A, allows many self-employed individuals to deduct up to 20% of their qualified business income from their taxes. This significantly reduces your federal income tax burden.

Yes! You only pay taxes on your NET profit, not your gross income. You can deduct 'ordinary and necessary' business expenses, such as software subscriptions, marketing costs, home office expenses, and mileage. These directly reduce your taxable income.

Yes, in most states. Unless you live in a state with no income tax (like Texas, Florida, or Nevada), you will also owe state income taxes on your 1099 earnings. This calculator focuses on federal taxes; you should set aside additional money for state taxes.

If you owe more than $1,000 in taxes at the end of the year and didn't make adequate quarterly estimated payments, the IRS will assess an underpayment penalty. It's essentially an interest charge on the money you should have sent them earlier.

Yes. For 2026, the Social Security portion (12.4%) only applies to the first $176,100 of your combined W-2 and self-employment earnings. The Medicare portion (2.9%) has no cap and applies to all earnings.