In Short
Contractors pay 15.3% self-employment tax on 92.35% of their profit, plus federal and state income tax on what's left after deductions [1][2]. Above $200,000 of earnings ($250,000 joint), a 0.9% Additional Medicare tax is added [8]. A single filer in Texas with $85,000 of 1099 income and $12,000 of expenses owes about $15,034 for 2026: $10,315 of self-employment tax and $4,719 of federal income tax, or about $1,253 a month.
How to Use the 1099 Tax Calculator
- Enter your 1099 income: everything clients paid you this year.
- Enter your business expenses. The tool uses the difference as your net profit.
- Add any W-2 wages from a job, your filing status and your state.
- Or tap Say It All: “I made 92k as a contractor in Texas, single, with 12,000 in business expenses.”
- Read the set-aside amounts: the monthly figure is a savings target, the quarterly one lines up with estimated payments.
The Formula
The calculator follows the order of a real return: self-employment tax first, then half of it comes off your income, then the standard and QBI deductions, then the brackets.
- Net profit = 1099 income − business expenses
- SE tax = net profit × 92.35% × 15.3% (12.4% only up to the Social Security wage base, less W-2 wages)
- Adjusted gross income = W-2 wages + net profit − ½ SE tax
- Taxable income = AGI − standard deduction − QBI deduction (20% of profit after the SE deduction, capped at 20% of taxable income)
- Tax on the 1099 work = SE tax + (income tax with the 1099 profit − income tax on wages alone) + state tax
- Set aside per month = total ÷ 12; per quarter = total ÷ 4
Worked Examples
| Scenario | Inputs | Result |
|---|---|---|
| Full-time contractor, single, Texas, 2026 | $85,000 income, $12,000 expenses | Profit $73,000 · SE tax $10,315 · federal $4,719 · total $15,034 (20.6%) · $1,253 a month |
| Part-time freelancer, single, Texas, 2026 | $60,000 income, $5,000 expenses | Profit $55,000 · SE tax $7,771 · federal $3,113 · total $10,885 · $907 a month |
| Married filing jointly, Texas, 2026 | $120,000 income, $20,000 expenses | Profit $100,000 · SE tax $14,130 · federal $5,335 · total $19,464 · $4,866 a quarter |
| Side work on top of a $70,000 job, single, Texas, 2026 | $40,000 income, $4,000 expenses, $70,000 W-2 wages | Profit $36,000 · SE tax $5,087 · extra federal $5,888 · total $10,975 (30.5% of the profit) |
Illustrative examples, not projections. Figures use the tax year shown and the assumptions above.
How Much Should a 1099 Contractor Set Aside for Taxes?
Most of the gap between a paycheck and a 1099 is self-employment tax. An employer pays half of Social Security and Medicare for employees; a contractor pays both halves, 15.3% in all, on 92.35% of profit [1][2]. Income tax comes on top, at the same brackets everyone uses [3].
In the examples above, the share runs from about 19% to 31% of profit. It rises when 1099 income sits on top of a salary, because the profit is taxed in a higher bracket. The calculator's monthly figure is a savings target for that money, not a payment the IRS asks for.
What Deductions Lower Tax on 1099 Income?
Business expenses come off first: anything ordinary and necessary for the work, such as software, supplies, a phone line or business mileage [5]. Lower profit lowers both self-employment tax and income tax.
Half of the self-employment tax is then deducted from income [2]. Most contractors also get the qualified business income (QBI) deduction: up to 20% of business profit, capped at 20% of taxable income, with more limits above the income threshold [4].
When Is Tax on 1099 Income Due?
There is no employer withholding on 1099 income, so the IRS expects estimated payments four times a year when you expect to owe $1,000 or more [6]. For 2026 the dates are April 15, June 15 and September 15, 2026, and January 15, 2027 [7]. The Quarterly Estimated Tax Calculator shows the amounts that avoid the underpayment penalty.
Frequently Asked Questions
How much tax do I pay on $50,000 of 1099 income?
With no expenses, a single filer in a state with no income tax pays about $7,065 of self-employment tax and about $2,667 of federal income tax for 2026, around $9,732 in all, or 19.5%. Business expenses lower both.
Is 1099 income taxed more than W-2 income?
The income tax brackets are the same. The difference is self-employment tax: a contractor pays the full 15.3% for Social Security and Medicare, where an employee pays 7.65% and the employer pays the rest [1].
Do I have to pay taxes on 1099 income under $600?
Yes. The $600 figure is when a client has to send a 1099 form, not when income becomes taxable. Self-employment tax starts once net earnings reach $400 [2], and all income counts for income tax.
How does a W-2 job change the tax on 1099 income?
Your wages fill the lower brackets first, so the 1099 profit is taxed at a higher rate. Wages also use up part of the Social Security wage base ($184,500 for 2026), which can lower the 12.4% part of self-employment tax on high combined income [2].
Does this calculator include state income tax?
It uses each state's brackets as the state table is filled in. Where a state isn't included yet, the result says so and shows the federal figures only. City and county taxes are not calculated.
Sources
- Self-Employment Tax (Social Security and Medicare Taxes) — Internal Revenue Service
- Instructions for Schedule SE (Form 1040) — Internal Revenue Service
- Rev. Proc. 2025-32: 2026 inflation adjustments (brackets, standard deduction, capital gains, QBI, child tax credit) — Internal Revenue Service
- Qualified business income deduction — Internal Revenue Service
- Self-employed individuals tax center — Internal Revenue Service
- Estimated taxes — Internal Revenue Service
- 2026 Form 1040-ES, Estimated Tax for Individuals (payment due dates) — Internal Revenue Service
- Questions and Answers for the Additional Medicare Tax — Internal Revenue Service
Official sources only: the IRS, SSA, BLS and other government agencies. Read how Zentavos researches.