1099 Tax Calculator
U.S. Flagship #09Tax & IncomeTotal tax on self-employed 1099 income.
Income & expenses
Enter your 1099 income to estimate your tax.
More options
Enter your 1099 income to estimate your tax.
2026 Single tax brackets
| Rate | Taxable income over |
|---|---|
| 10% | $0 |
| 12% | $12,400 |
| 22% | $50,400 |
| 24% | $105,700 |
| 32% | $201,775 |
| 35% | $256,225 |
| 37% | $640,600 |
Your inputs
| Input | What it means | Your value |
|---|---|---|
| Tax year | The tax year whose brackets and limits apply | 2026 |
| Filing status | Your filing status | Single |
| Gross 1099 income | Self-employment revenue before expenses | $0 |
| Business expenses | Deductible business costs | $0 |
| Deduction | Standard or itemized deduction | Standard |
| QBI deduction | Whether the 20% QBI deduction is applied | Apply 20% |
Know what this estimate is based on
- Jurisdiction
- United States federal and self-employment tax
- Rules and time period
- Tax years 2024–2026; state and local tax are not included.
- Scope and limitations
- Educational estimate only, not a tax return or filing determination. U.S. statutory-threshold tools use USD. Confirm current law and your facts with the relevant authority or a qualified tax professional.
- Source links checked
- Jul 30, 2026
Built and regression-tested by Smart Tools Lab. It has not been individually reviewed by a licensed financial, tax, or legal professional.
How to use
- 01
Enter your gross 1099 revenue and subtract business expenses to get Schedule C net profit, then choose your tax year and filing status.
- 02
Let the tool multiply net profit by 92.35% and apply the 15.3% rate to find your self-employment tax and its deductible half.
- 03
Follow the income-tax path it lays out: AGI, the standard deduction, the 20% QBI deduction, and the resulting taxable income.
- 04
Read your combined federal total, effective rate and after-tax income to see the whole contractor's-eye picture in one place.
- 05
Divide the total by four for a quarterly estimate, and set the money aside before each April, June, September and January deadline.
Formula
Step 1 - Net profit: gross 1099 revenue minus business expenses $90,000 - $10,000 = $80,000 Step 2 - Net earnings from self-employment: net profit x 92.35% $80,000 x 0.9235 = $73,880 Step 3 - Self-employment tax: 15.3% in two parts Social Security 12.4% x $73,880 = $9,161.12 Medicare 2.9% x $73,880 = $2,142.52 SE tax = $9,161.12 + $2,142.52 = $11,303.64 (no 0.9% surtax — income is below $200,000) Step 4 - Deductible half of SE tax $11,303.64 / 2 = $5,651.82 Step 5 - Adjusted gross income: net profit minus deductible half $80,000 - $5,651.82 = $74,348.18 Step 6 - Taxable income before QBI: AGI minus standard deduction $74,348.18 - $16,100 = $58,248.18 Step 7 - QBI deduction: 20% of $58,248.18 = $11,649.64 Taxable income = $58,248.18 - $11,649.64 = $46,598.54 Step 8 - Federal income tax (2026 single brackets) 10% x $12,400 = $1,240.00 12% x $34,198.54 = $4,103.82 Income tax = $5,343.82 (marginal bracket 12%) Step 9 - Total federal tax $11,303.64 + $5,343.82 = $16,647.46 Effective rate = $16,647.46 / $80,000 = 20.81% After-tax income = $63,352.54 Step 10 - Quarterly estimate $16,647.46 / 4 ≈ $4,162
Example
Picture a single freelance designer in 2026 who invoices $90,000 over the year and spends $10,000 on software, a home-office share and supplies. That leaves Schedule C net profit of $80,000, the figure both federal taxes build on. Self-employment tax comes first: $80,000 times 92.35% gives $73,880 of net earnings, and 15.3% of that is $11,303.64 — $9,161.12 for Social Security plus $2,142.52 for Medicare, with no 0.9% surtax because she is far below $200,000. Now the income-tax layer. She deducts half of her SE tax, $5,651.82, to reach an adjusted gross income of $74,348.18. Subtracting the 2026 single standard deduction of $16,100 leaves $58,248.18, and the 20% QBI deduction of $11,649.64 brings taxable income to $46,598.54. Running that through the brackets — 10% on the first $12,400 and 12% on the next $34,198.54 — produces $5,343.82 of income tax, a 12% marginal bracket. Add the layers together and her total federal tax is $16,647.46: self-employment tax of $11,303.64 plus income tax of $5,343.82. That is an effective rate of 20.81% on her $80,000 profit, leaving $63,352.54 after tax, and it points to quarterly payments of roughly $4,162. These figures are an educational estimate of federal tax only — not legal, accounting or tax advice — and a real return would also weigh state tax, credits and her full circumstances.
Definitions
- Self-employment tax
- The Social Security and Medicare tax paid by people who work for themselves, at a combined 15.3% on net earnings. It replaces the payroll tax that an employer and employee would otherwise split between them.
- Net earnings from self-employment
- What is left after trimming Schedule C profit by the 7.65% employer-equivalent slice (profit x 0.9235); the 15.3% rates, the $400 floor and the wage cap all read off this figure, not raw profit. In the example, $80,000 of profit becomes $73,880.
- Schedule C net profit
- Your gross 1099 revenue minus ordinary and necessary business expenses. It is the launch point for both self-employment tax and income tax.
- Deductible half of SE tax
- Half of the self-employment tax you owe, claimed above the line — standard-deduction takers included. It was $5,651.82 in the example; the 0.9% Additional Medicare surtax is never part of the halved amount.
- QBI deduction
- The qualified business income deduction, worth up to 20% of business income for eligible pass-through owners. It reduces income tax only, not self-employment tax.
- Social Security wage base
- Social Security's 12.4% slice stops at a yearly earnings cap — $168,600 (2024), $176,100 (2025) and $184,500 (2026); profit past the cap escapes that 12.4% but never the 2.9% Medicare piece.
- Additional Medicare tax
- An extra 0.9% Medicare tax on net earnings above $200,000 for single filers, $250,000 for joint filers and $125,000 if married filing separately. It is not halved like the rest of SE tax.
- Estimated (quarterly) tax
- Advance payments of income and self-employment tax made four times a year — generally April 15, June 15, September 15 and January 15 — because no employer withholds for the self-employed.
- Adjusted gross income (AGI)
- Your net profit minus the deductible half of self-employment tax and other above-the-line adjustments. In the example AGI was $74,348.18, the figure from which the standard deduction is then subtracted.
- Marginal rate
- The rate sitting on the top slice of taxable income — 12% for the single filer in the example. It is higher than your effective rate.
- Effective rate
- The full tax bill expressed as a share of a chosen income base. Here $16,647.46 of combined federal tax on $80,000 of profit is an effective rate of 20.81%.
- Combined marginal rate
- The true cost of your next dollar of profit once self-employment tax and income tax are stacked together and offset by the deductible-half and QBI effects. It is the right figure for deciding whether to take on more work.
Good to know
Why 1099 income carries two federal taxes at once
A W-2 employee and a 1099 contractor can earn the same dollar and owe very different amounts to the federal government, and the reason is that contractor income is taxed twice over at the federal level. The first layer is self-employment tax — the contribution that bankrolls Social Security and Medicare. When you work for someone else, your employer quietly pays half of those payroll taxes and withholds the other half from your check, so you rarely see the full cost. When you are your own boss, you are treated as both the employer and the employee, so the entire 15.3% combined rate lands on you. The second layer is ordinary federal income tax, the same graduated tax that every taxpayer pays on taxable income. Most people who switch from a salary to contracting are rattled by their first tax bill precisely because they were only ever aware of the income-tax layer. This calculator exists to stitch those two layers together into a single estimate, then subtract the deductions a contractor is entitled to, so you can see the full federal picture in one place rather than guessing. In our running example, an unmarried filer whose 2026 net profit is $80,000 owes $11,303.64 of self-employment tax and $5,343.82 of income tax, for a combined federal bill of $16,647.46. Neither number means much on its own; the contractor cares about the total and about what is left over to live on. Notice that the self-employment tax here is more than double the income tax, which is the opposite of what most salaried workers expect. Understanding that the two taxes are computed on different bases, at different rates, and with their own deductions is the key to never being caught short again. Everything that follows builds on that two-tax foundation, and every figure is an estimate rather than tax advice.
How self-employment tax actually works
Self-employment tax is calculated on a special figure called net earnings from self-employment, not on your gross revenue and not directly on your profit. You start with Schedule C net profit — revenue minus business expenses — and multiply it by 92.35%. That haircut exists because employees do not pay payroll tax on the employer's share, so the law shaves off an equivalent slice to keep the two on level terms. In the example, $80,000 of net profit becomes $73,880 of net earnings. The combined 15.3% rate then splits into two parts that behave very differently. At 12.4%, the Social Security portion reaches only as high as an annual wage base — $184,500 for 2026 — beyond which no further Social Security tax is owed. The Medicare portion is 2.9% and has no ceiling at all; it applies to every dollar of net earnings. On $73,880 the math is $9,161.12 of Social Security tax plus $2,142.52 of Medicare tax, totaling $11,303.64. Because this contractor earns well under the wage base, the full 15.3% applies to all of the net earnings and the cap never bites. There is one more wrinkle for higher earners: an extra 0.9% Additional Medicare tax kicks in on earnings above $200,000 for a single filer, but it does not apply here. Crucially, half of your self-employment tax can be subtracted when figuring income tax, which softens the second layer. In the example that deduction is $5,651.82, exactly half of $11,303.64. That deductible half is an adjustment to income, meaning standard-deduction takers claim it too. The 0.9% surtax, when it applies, is never part of the halved amount. These figures are estimates for planning and are not a substitute for professional tax advice.
The QBI deduction — 20% off, with a caveat
The qualified business income (QBI) deduction is one of the few breaks that genuinely benefits the self-employed, and it can erase a fifth of your business income from taxation. In broad terms it lets eligible owners of pass-through businesses — sole proprietors, partnerships, S-corporations and most 1099 contractors — deduct up to 20% of their qualified business income. The deduction is not subtracted from your business profit before self-employment tax; it only reduces taxable income for the income-tax layer, and it is taken after the standard or itemized deduction. The amount is the lesser of 20% of your QBI and 20% of your taxable income before the QBI deduction itself. In the example, taxable income before QBI is $58,248.18, so 20% of that is $11,649.64, and because that ceiling is smaller than 20% of the QBI base, $11,649.64 is the deduction that applies. That single line drops taxable income to $46,598.54 and trims the bill in the 12% bracket. Eligibility carries an important caveat for higher earners. Once taxable income climbs above an annual threshold, specified service trades — fields such as law, health, consulting, accounting and financial services — begin to lose the deduction, and other businesses face wage-and-property limits that can cap or eliminate it. Those high-income wage and UBIA limits are intricate and are out of scope for this estimator, which assumes you fall under the threshold where the simple 20% applies. If your income is high or your work is a specified service field, treat the QBI figure here as a ceiling and confirm the details with a tax professional. The deduction is set by current law and its exact thresholds change yearly, so the number you see is an educational estimate rather than a guarantee.
From gross revenue down to taxable income
Following one dollar of revenue all the way down to taxable income is the clearest way to see how a contractor's bill is built, and the order of operations matters. Start at the top with gross 1099 revenue — every payment reported to you on a 1099-NEC or 1099-K, plus cash you were paid. Subtract ordinary and necessary business expenses to reach Schedule C net profit; in the example $90,000 of revenue minus $10,000 of expenses leaves $80,000. That net profit is the launch point for both taxes. For the self-employment layer, applying the 92.35% factor yields $73,880 of net earnings, and 15.3% of that reaches $11,303.64. For the income-tax layer, begin again from the $80,000 net profit, subtract the deductible half of self-employment tax of $5,651.82 to land on adjusted gross income of $74,348.18. From AGI subtract the standard deduction — $16,100 for a 2026 single filer — to get taxable income before QBI of $58,248.18. Then subtract the QBI deduction of $11,649.64 to reach final taxable income of $46,598.54. That last figure is what the income-tax brackets actually act on. The sequence is worth memorizing: revenue, minus expenses, equals net profit; net profit drives SE tax directly; net profit minus half of SE tax equals AGI; AGI minus the standard deduction equals taxable income before QBI; minus QBI equals taxable income. Each subtraction along the way lowers the eventual income tax, which is why contractors who track the full chain rarely overpay. The standard deduction and the wage base change every year, so the same revenue produces a slightly different answer in 2024, 2025 and 2026. The calculator handles all four filing statuses and the latest constants for each year, but every result it produces is a planning estimate, not filed-return precision or tax advice.
Marginal, effective and the combined rate on your next dollar
Three different rates describe a contractor's tax, and confusing them leads to bad decisions. The marginal rate is the rate sitting on the top slice of taxable income — what one extra dollar of profit would meet; in the example, final taxable income of $46,598.54 sits in the 12% bracket for a 2026 single filer, so the marginal income-tax rate is 12%. Your effective rate takes the full tax bill and divides it across a chosen base, and it always comes in below the marginal rate because the early dollars are taxed lightly or not at all. Here the combined federal tax of $16,647.46 against $80,000 of net profit is an effective rate of 20.81%, leaving $63,352.54 after tax. But the number that should drive a contractor's decisions is the combined marginal rate — what the very next dollar of profit actually costs once both taxes are stacked. That next dollar triggers self-employment tax and income tax together, partly offset by the deductible half of SE tax and by the QBI deduction shrinking the income-tax base. The practical upshot is that the true cost of earning one more dollar of profit, or the true saving from one more deductible expense, is meaningfully higher than the 12% bracket alone suggests, yet lower than a naive 15.3% plus 12% would imply. This is why effective rate is the right lens for budgeting how much of the year's income you will keep, while combined marginal rate is the right lens for deciding whether to take on an extra project, buy a piece of equipment, or contribute to a retirement account. The calculator surfaces all three so you are never reasoning from a single misleading figure. Treat these percentages as estimates that move with your income and the year's constants, not as advice for any specific transaction.
Estimated quarterly taxes — why four times a year
Salaried workers have tax withheld from every paycheck, but nobody withholds from a contractor's invoices, so the federal government asks the self-employed to pay as they go in four estimated installments. The deadlines fall on roughly the fifteenth of April, June, September and the following January — note the uneven gaps, which trip up people who assume even three-month spacing. Each payment covers both layers of tax at once: a slice of the income tax and a slice of the self-employment tax. The simplest way to size them is to estimate your full-year total and divide by four. In the example, the combined bill of $16,647.46 divided by four is about $4,162 per quarter. Paying that amount on schedule keeps you roughly current and avoids the underpayment penalty the IRS charges when too little is paid during the year. If your income is uneven — a big project in the spring, a quiet autumn — you can pay more in strong quarters and less in lean ones using the annualized-income method, though the even-quarters approach is easier and safe for most. Many contractors lean on a safe-harbor rule: pay at least 100% of last year's total tax, or 110% if your income is high, and you generally avoid penalties even if this year turns out bigger. A common habit that prevents nasty surprises is to move a fixed share of every payment you receive — often a quarter to a third — into a separate account the moment it arrives, then send the quarterly check from that pot. Because the estimate blends two taxes and a year's worth of moving parts, the per-quarter figure is a planning target rather than an exact obligation, and it is not tax or accounting advice. Recalculate whenever your income changes materially during the year.
How business expenses cut both taxes at once
A legitimate business expense is unusually powerful for a contractor because it cuts both federal taxes at the same time, which is not true for most other deductions. When you spend on something ordinary and necessary for your work — software, mileage, a home-office share, professional insurance, supplies — it lowers Schedule C net profit dollar for dollar. Because net profit is the starting point for self-employment tax, every deductible dollar shaves 15.3% off the SE layer, subject to the 92.35% factor, and also lowers the income on which income tax is later computed. In the example, the $10,000 of expenses that took revenue from $90,000 down to $80,000 of net profit reduced both the $11,303.64 SE tax and the $5,343.82 income tax beneath what they would otherwise have been. Contrast that with the standard deduction or QBI, which only touch the income-tax layer. The double benefit means the real after-tax cost of a $1,000 business purchase is well below $1,000 once both taxes are accounted for. That is also why diligent record-keeping pays off more for the self-employed than for employees: a forgotten receipt is not just a missed income-tax deduction, it is also extra self-employment tax you never had to pay. The flip side is discipline — an expense only counts if it is genuinely business-related and properly documented, and stretching personal costs into business deductions invites trouble in an audit. A SEP-IRA or solo 401(k) is the half-exception: it shelters income from the brackets but leaves the 15.3% base untouched, so it eases one tax, not both, while still cutting the overall bill. The calculator works from the net-profit figure you enter, so the accuracy of your expense tracking flows straight through to the estimate, which remains a planning tool rather than tax advice.
What happens at the edges — losses and small income
The calculator behaves sensibly at the edges of the income range, and understanding those edges prevents over-paying on small or negative years. The first edge is the $400 floor: if the 92.35% haircut leaves you under $400 of countable earnings for the year, Schedule SE is skipped and no self-employment tax is due, though you may still owe income tax and generally still must file. This protects people with tiny side gigs from the full 15.3% machinery. The second edge is a business loss. If expenses exceed revenue, Schedule C net profit is negative, there is no self-employment tax to pay, and the loss can offset other income on your return, lowering your overall income tax. A contractor with a $5,000 loss and a spouse's W-2 wages, for instance, may see the household's taxable income fall. The third edge is income that lands below your deductions. If your taxable income before QBI is zero or negative after subtracting the standard deduction, there is no income tax and no QBI deduction to take — you cannot deduct 20% of a number that is already at or below zero. In that situation the self-employment tax may be your entire federal bill, which surprises people who assumed a small profit meant a small total. This is the mirror image of the main example, where SE tax dwarfs income tax; at low incomes the income-tax layer can vanish entirely while the SE layer persists down to the $400 floor. Knowing where these thresholds sit helps you plan around them — timing an expense, or recognizing that a break-even year still carries no SE cost. As always these are educational estimates of federal tax only; a genuine loss year in particular can involve carryforward rules and basis limits that are out of scope here and worth discussing with a professional.
Mixing a W-2 job with 1099 work
Plenty of people hold a salaried job and contract on the side, and the two income streams interact in ways worth understanding. The income-tax layer is straightforward: your W-2 wages and your 1099 net profit stack on top of each other to set your total taxable income, which can push the side-gig profit into a higher bracket than it would face on its own. The self-employment layer is where the coordination gets interesting, because the Social Security wage base is shared across both jobs. Social Security tax — the 12.4% portion — applies only up to $184,500 of combined earnings in 2026, and the payroll tax already withheld from your salary counts toward that ceiling. If your W-2 wages alone exceed the wage base, your 1099 net earnings owe no additional Social Security tax, only the uncapped 2.9% Medicare portion. If your wages are below the base, your self-employment earnings fill the remaining gap up to the cap and pay the full 12.4% only on that slice. The 2.9% Medicare tax, having no ceiling, always applies to your net earnings regardless of your salary. Withholding from the W-2 job can also do double duty: by adjusting your Form W-4 to withhold extra, you can cover some or all of the tax on your contracting income and reduce or eliminate the need for separate quarterly payments, since withholding is treated as paid evenly through the year. That single move solves the uneven-deadline problem for many moonlighters. The interplay of two wage sources, a shared cap and blended withholding is exactly the kind of coordination a combined calculator is built to handle, but a mixed-income return has more moving parts than a single-source one. The estimate here is a federal planning figure and not payroll or tax advice; confirm any withholding changes with your employer or a professional.
The limits of this estimate
Every number this calculator produces is an educational estimate of federal tax, and it is important to know exactly what it does not cover. It does not compute state or local income tax, which can add several percentage points in many places and nothing at all in others. It leaves out the alternative minimum tax, the 3.8% surtax on investment income, and the intricate high-earner QBI wage-and-property limits, all of which can change the answer for particular taxpayers. It also does not apply tax credits — the child tax credit, education credits, the earned income credit and others — which reduce the final bill and which depend on facts the tool does not ask for. It assumes the simple 20% QBI deduction rather than the phased-out version that affects high earners and specified service businesses. The constants it uses — the wage base, the standard deduction, the bracket thresholds — are the published figures for 2024 through 2026, and a future year or a mid-year law change would shift the results. Because it works from the net-profit figure you provide, its accuracy depends entirely on yours; a rough expense estimate produces a rough tax estimate. None of this output is professional tax, accounting or legal counsel, and it should not be used to file a return or to make a binding financial decision on its own. Its purpose is to give a contractor a fast, realistic sense of the combined federal burden — self-employment tax plus income tax, net of QBI — so you can set aside the right amount, size your quarterly payments, and avoid being blindsided in April. For anything consequential, take these figures to a qualified tax professional who can account for your full, specific situation and the items this estimate deliberately leaves out.
Frequently asked questions
How much should I set aside for taxes on 1099 income?
A common rule of thumb is to reserve 25% to 30% of every 1099 payment for federal taxes, then refine it with a real estimate. In the worked example, an unmarried filer reporting $80,000 of net profit owed $16,647.46 in combined federal tax — an effective rate of about 20.81% — so setting aside roughly a quarter to a third would have comfortably covered it. Your own share depends on your profit, filing status, other income and state tax, which is separate. The safest approach is to run your numbers, divide by four, and move that amount into a dedicated account as invoices arrive. This is an estimate, not tax advice.
Do I pay both self-employment tax and income tax?
Yes. That is the defining feature of 1099 income and the reason it feels heavier than a salary. You pay self-employment tax — the levy that underwrites Social Security and Medicare at a combined 15.3% — and you also pay ordinary federal income tax on your taxable income. An employee splits payroll tax with their employer and only sees the income-tax side, but a contractor is both employer and employee and carries the whole load. In the example the two layers were $11,303.64 of self-employment tax and $5,343.82 of income tax, totaling $16,647.46. This calculator combines both so you see the full bill rather than just one piece.
What is the 92.35% number for?
The 92.35% factor recasts your business profit as net earnings from self-employment, the base for self-employment tax. It equals 100% minus 7.65%, which represents the employer-side payroll tax an employee would not pay on their own behalf. Scaling profit by 92.35% leaves the self-employed on roughly the same footing as wage earners. In the example, $80,000 of net profit becomes $73,880 of net earnings, and the 15.3% self-employment rate is applied to that smaller figure rather than to the full profit. It is a small adjustment, but it lowers your SE tax slightly. The result here is a planning estimate, not advice.
Do I qualify for the QBI deduction?
Most independent contractors qualify for the qualified business income deduction, which can remove up to 20% of business income from income tax. If your taxable income is under the annual threshold, you generally take the simple 20% — in the example that was $11,649.64, calculated as 20% of taxable income before the deduction. Above the threshold, specified service fields such as law, health, consulting and accounting begin to lose it, and other businesses face wage-and-property limits. Those high-income rules are detailed and out of scope for this estimate, which assumes the simple version applies. If your income is high or your field is a service trade, confirm with a professional.
When are quarterly taxes due?
Estimated taxes are due in four installments, generally on April 15, June 15, September 15 and the following January 15. The spacing is uneven — the second installment falls just two months after the first — which catches many new contractors off guard. Each payment covers both your income tax and your self-employment tax for that part of the year. A simple way to size them is to estimate your annual total and divide by four; in the example, $16,647.46 split four ways is about $4,162 per quarter. If a date lands on a weekend or holiday, it shifts to the next business day. Treat these as planning targets, not advice.
What happens if I don't make estimated payments?
If you pay too little during the year, the IRS can charge an underpayment penalty, which works like interest on the shortfall for the time it was outstanding. You can usually avoid it by satisfying a safe harbor: cover at least 100% of last year's total tax (110% for high earners), or at least 90% of what this year ultimately owes. Withholding from a W-2 job counts and is treated as paid evenly across the year, so adjusting your W-4 is one way to stay covered. Paying roughly $4,162 each quarter in the example keeps the contractor current. Recalculate if your income jumps. This is general information, not tax advice.
Is 1099 income below $400 taxed?
If the 92.35% haircut leaves your countable earnings under $400, the self-employment tax is skipped entirely — a statutory floor designed to spare very small side gigs the 15.3% machinery. You may still owe income tax on the money, and you generally still need to report it on your return, but the SE layer drops away. Above $400, self-employment tax applies to all of your net earnings, not just the amount over the threshold. So a tiny profit can be tax-light, while a profit just over the line carries the full SE calculation. As always, this is an educational estimate of federal tax, not advice.
What if my business loses money this year?
If your expenses exceed your revenue, your Schedule C net profit is negative, so there is no self-employment tax to pay — the 15.3% only ever applies to positive net earnings. The loss itself can offset other income on your return, such as a spouse's W-2 wages, lowering your overall income tax for the year. You also cannot take a QBI deduction on a figure that is at or below zero. A genuine loss year can involve carryforward rules and basis limits that this tool does not model, so treat the result as a planning estimate of federal tax and confirm the details with a professional.
Can business expenses really lower my taxes?
Yes, and uniquely for the self-employed, a legitimate business expense cuts both federal taxes at once. Spending on ordinary and necessary items — software, mileage, supplies, a home-office share — lowers your Schedule C net profit, which is the base for self-employment tax and the starting point for income tax. In the example, $10,000 of expenses reduced profit to $80,000 and trimmed both the SE tax and the income tax beneath what they would otherwise have been. The expense must be genuinely business-related and well documented. Retirement contributions are a partial exception: they cut income tax but not SE tax. This is an estimate, not accounting advice.
I have a W-2 job and 1099 work — how does that change my SE tax?
Your W-2 wages and 1099 profit stack for income tax, but for Social Security they share a single annual cap — $184,500 in 2026. The Social Security tax already withheld from your salary counts toward that ceiling, so if your wages alone exceed it, your contracting earnings owe no additional Social Security tax, only the uncapped 2.9% Medicare portion. If your wages are below the cap, your self-employment earnings fill the gap and pay the full 12.4% on that slice. You can also have extra tax withheld from your paycheck to cover the side income and reduce quarterly payments. A mixed return has more moving parts; this is a planning estimate.
Why is my self-employment tax bigger than my income tax?
Because the two taxes are computed on different bases. Self-employment tax applies a flat 15.3% to nearly all of your net earnings, with no standard deduction or QBI break to shrink it. Income tax, by contrast, only starts after you subtract the deductible half of SE tax, the standard deduction and the QBI deduction, so much of your profit is sheltered before the brackets even apply. In the example, $11,303.64 of SE tax dwarfed $5,343.82 of income tax for exactly that reason. At lower incomes the income-tax layer can disappear entirely while SE tax persists down to the $400 floor. These are estimates of federal tax only.
What is the difference between gross 1099 income and net profit?
Gross 1099 income is the total payments reported to you — on 1099-NEC or 1099-K forms, plus cash — before any costs. Net profit is what remains after you subtract ordinary and necessary business expenses on Schedule C, and it is the figure that actually drives both of your federal taxes. In the example, $90,000 of gross revenue minus $10,000 of expenses gives $80,000 of net profit. You are taxed on the $80,000, not the $90,000, which is why tracking every legitimate expense matters so much for a contractor. Enter an accurate net-profit figure and the estimate will reflect your real situation.
Does this calculator include state taxes?
No. This tool estimates federal tax only — self-employment tax plus federal income tax, net of the QBI deduction. State and local income taxes are separate and vary widely: some states have none, while others add several percentage points to your effective rate. It also sets aside several items entirely: the 3.8% net investment income tax, the alternative minimum tax, tax credits, and the detailed high-income QBI limits. Because of all that, the result is an educational estimate to help you plan and size quarterly payments, not a filed-return figure and not professional tax, accounting or legal counsel. For your full picture, consult a qualified professional.