How 1099 income is taxed
When you’re paid on a 1099, nobody withholds tax from your pay. You owe two separate taxes on your profit (business income minus business expenses), and you pay them yourself:
- Self-employment tax: Social Security and Medicare, the same taxes an employee pays through payroll, except you pay both the employee and the employer halves.
- Income tax: federal, and state where your state has one, at the same rates as wages.
The calculator works out both from your 2026 net profit, filing status and state.
Self-employment tax in 2026
Self-employment tax (Schedule SE) is figured on 92.35% of your net profit. That reduction stands in for the employer’s half of payroll taxes, which an employer wouldn’t count as your wages.
- Social Security: 12.4% of net earnings, up to the 2026 wage base of $184,500. If you also have W-2 wages, they use up the base first: with $180,000 of wages, only $4,500 of self-employment earnings pay Social Security tax.
- Medicare: 2.9% of all net earnings, with no cap.
- Additional Medicare Tax: 0.9% on combined wages and self-employment earnings above $200,000 (single or head of household) or $250,000 (married filing jointly).
There’s no self-employment tax if your net earnings are under $400.
Example: $60,000 of profit gives net earnings of $55,410. Social Security is $6,870.84, Medicare $1,606.89, so self-employment tax is $8,477.73.
Deductions that lower your income tax
Half of the self-employment tax (not counting the Additional Medicare Tax) is an adjustment to income, so you don’t pay income tax on it. In the example that’s $4,238.87, leaving adjusted gross income of $55,761.13.
The standard deduction for 2026 is $16,100 single, $32,200 married filing jointly and $24,150 head of household.
The qualified business income (QBI) deduction lets many self-employed people deduct 20% of their business profit (reduced by the deductible half of SE tax). It’s capped at 20% of taxable income before the deduction. From 2026 there’s also a minimum deduction of $400 if your qualified business income is at least $1,000. The calculator includes QBI only in the simple case: taxable income at or below the 2026 threshold of $201,750 ($403,500 married filing jointly), per IRS Rev. Proc. 2025-32. Above it, the deduction depends on your type of business and the wages it pays, so the calculator leaves it out and tells you so.
In the example, QBI is limited to 20% of $39,661.13 of taxable income, $7,932.23, which leaves $31,728.91 taxed at 10% and 12%: $3,559.47 of federal income tax. Together with self-employment tax, that’s $12,037.20, or $3,009.30 per quarter.
W-2 and 1099 together
If you have a job and a side business, switch to W-2 + 1099. The calculator then shows the tax your 1099 profit adds: income tax on your total income minus income tax on your wages alone, plus self-employment tax. Your job’s withholding is assumed to cover the tax on your wages. Because the side income sits on top of your salary, it’s taxed at your highest bracket, which is why a side gig often feels more heavily taxed than your paycheck.
Quarterly estimated taxes
You generally have to pay estimated tax during the year if you expect to owe $1,000 or more when you file. The 2026 due dates (Form 1040-ES):
| Income earned | Due |
|---|---|
| January 1 – March 31 | April 15, 2026 |
| April 1 – May 31 | June 15, 2026 |
| June 1 – August 31 | September 15, 2026 |
| September 1 – December 31 | January 15, 2027 |
A due date that falls on a weekend or legal holiday moves to the next business day. The calculator splits your federal total into four equal payments. To avoid an underpayment penalty, you usually need to pay the smaller of 90% of your 2026 tax or 100% of your 2025 tax (110% if your 2025 adjusted gross income was over $150,000). If your income is uneven, the annualized method on Form 2210 can lower the early payments.
State income tax
The state line is an estimate: your federal adjusted gross income, less the state’s 2026 standard deduction and personal exemption, run through the state’s 2026 brackets. It skips state credits, local income taxes and the many ways states adjust federal income. If we don’t have a state’s annual brackets yet, the calculator shows “not estimated” rather than guess. Most states with an income tax also expect quarterly payments, on dates that don’t always match the federal ones.
What isn’t included
Retirement contributions (SEP-IRA, solo 401(k)), the self-employed health insurance deduction, itemized deductions, credits and other income all change your tax. Use the result as a planning number, and adjust once your books for the year are closed.