1099 Tax Calculator for Independent Contractors

Enter your gross 1099 income, business expenses, filing status, any W-2 wages, and your state to estimate your 2026 self-employment tax, federal income tax, QBI deduction, and quarterly estimated payment.

The short answer: on $65,000 of 2026 net profit with no other income, a single contractor owes about $9,184 of self-employment tax and $4,006 of federal income tax — $13,190 in total, or $3,297 per quarter. Self-employment tax is 15.3% of 92.35% of your profit; income tax is figured after deducting half of that SE tax, the standard deduction and the 20% QBI deduction.

The calculator is for informational purposes only. Its results are estimates based on the standard deduction and do not include credits, itemized deductions, or local taxes.

How 1099 income is taxed

A 1099 means you are paid as an independent contractor, not an employee. No one withholds tax from your payments, and you pay both halves of FICA yourself through self-employment tax — the share an employer would normally pay plus the share an employee pays. On top of that, your profit is subject to regular income tax.

Your tax bill has three federal layers:

1. Self-employment tax on Schedule SE — Social Security and Medicare.
2. Additional Medicare Tax of 0.9% on Form 8959, only for high earners.
3. Federal income tax on Form 1040, after deductions.

State income tax is a fourth layer in most states.

The 1099-NEC and 1099-MISC

Form 1099-NEC reports payments for services. For payments made in 2026, a client must issue one only when it pays you $2,000 or more in the year — up from $600 before the One Big Beautiful Bill Act, according to the IRS Form 1099-NEC FAQs. Payment apps report on Form 1099-K only above $20,000 and 200 transactions.

Form 1099-MISC covers rents, royalties, prizes and other non-service payments.

The form is a reporting document, not the trigger for tax. Income from a client who paid you $1,500 and sent no form is still taxable, and you report all of it on Schedule C.

Self-employment tax, step by step

Self-employment tax is figured on Schedule SE:

1. Net profit = gross 1099 income − business expenses (Schedule C line 31).
2. Net earnings from self-employment = net profit × 92.35%. The 7.65% reduction mirrors the fact that employees don't pay FICA on the employer's half.
3. If net earnings are under $400, there is no SE tax.
4. Social Security: 12.4% of net earnings up to the 2026 wage base of $184,500 (SSA). If you also have W-2 wages, they use up the base first, so only $184,500 − wages is left for SE income.
5. Medicare: 2.9% of all net earnings, with no cap.

Half of the SE tax is deductible on Schedule 1, which lowers your adjusted gross income (IRS Self-Employment Tax).

Example: $80,000 gross, $15,000 expenses, single

• Net profit: $65,000
• Net earnings: $65,000 × 92.35% = $60,027.50
• Social Security: $60,027.50 × 12.4% = $7,443
• Medicare: $60,027.50 × 2.9% = $1,741
• SE tax: $9,184, of which half — $4,592 — is deductible

Additional Medicare Tax

The 0.9% Additional Medicare Tax applies to net earnings above $200,000 for single and head-of-household filers, $250,000 for joint filers and $125,000 for married filing separately (Form 8959). W-2 wages reduce that threshold first. It is a separate tax from SE tax: it is not part of the amount you deduct half of.

A single consultant with $300,000 of profit has net earnings of $277,050. Social Security is capped at $184,500 × 12.4% = $22,878, Medicare is $8,034, and Additional Medicare is ($277,050 − $200,000) × 0.9% = $693. The deductible half is ($22,878 + $8,034) ÷ 2 = $15,456 — the $693 is not included.

Federal income tax on 1099 income

Taxable income is your AGI minus the standard deduction and the QBI deduction. AGI is net profit plus any other income, minus half of SE tax and any self-employed retirement or health insurance deductions.

2026 brackets for single filers (IRS Rev. Proc. 2025-32):

The 2026 standard deduction is $16,100 single or married filing separately, $32,200 married filing jointly, and $24,150 head of household. The federal tax bracket calculator shows the tables for every filing status.

Continuing the $65,000 profit example:

That is 16.5% of gross receipts and 20.3% of net profit.

The QBI deduction

The qualified business income deduction lets most sole proprietors deduct up to 20% of qualified business income (IRS QBI deduction). Two details trip people up:

• QBI is not your full profit. It is profit minus the deductible half of SE tax, minus self-employed health insurance and retirement contributions attributable to the business. In the example, QBI is $65,000 − $4,592 = $60,408.
• The deduction is capped at 20% of taxable income before QBI. In the example, 20% × $60,408 = $12,082, but 20% × $44,308 = $8,862, so the cap wins.

Income limits for 2026. Below taxable income of $201,750 ($403,500 joint), you get the full deduction. Above that, it phases down over the next $75,000 ($150,000 joint). A sole proprietor with no employees has no W-2 wages, so for any business the deduction shrinks to zero by $276,750 ($553,500 joint); for a specified service business — health, law, accounting, consulting, financial services and similar fields — the business's income stops counting at the same point. From 2026 there is a $400 minimum deduction for active businesses with at least $1,000 of QBI.

At $300,000 of profit, single, the calculator shows a QBI deduction of about $6,300 for a non-service business and $698 for a specified service business — both deep in the phase-in range. Model these cases in detail with the QBI deduction calculator.

If you also have a W-2 job

Side income stacks on top of your wages, so it is taxed at your marginal rate from the first dollar. The calculator separates the tax your 1099 income adds from the tax on your wages, which your employer already withholds.

Example: $70,000 of W-2 wages plus a $20,000 side business with $2,000 of expenses, single.

• SE tax on $18,000 of profit: $2,543
• Extra federal income tax caused by the side income: $2,944
• Tax added by the 1099 income: $5,488, or 27.4% of the $20,000 gross
• Quarterly payment for the side income: about $1,372

Instead of quarterly payments, you can raise your W-2 withholding on line 4(c) of Form W-4 — withholding counts as paid evenly through the year. The tax withholding calculator helps you size it, and the side hustle calculator covers smaller gigs.

State income tax

The calculator applies a simple state estimate to AGI: flat-rate states use their flat rate, Colorado uses federal taxable income, and graduated-rate states use their top rate, which overstates tax for most people. If you know your state's effective rate, enter it in the optional field. States with no wage income tax — Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming — show $0.

Quarterly estimated tax payments

With no withholding, you pay during the year through estimated tax. The 2026 due dates from the IRS Form 1040-ES are:

You avoid the underpayment penalty if withholding and timely estimates cover the lesser of 90% of this year's tax or 100% of last year's tax (110% if last year's AGI was over $150,000, or $75,000 married filing separately). The penalty works like interest: the federal short-term rate plus 3 percentage points, charged on each late or short installment. Pay through IRS Direct Pay, EFTPS, or with the 1040-ES vouchers. The quarterly estimated taxes guide walks through the annualized-income method for uneven income.

The calculator's quarterly figure is one-fourth of your federal SE tax, Additional Medicare and the income tax your 1099 income adds. State estimated payments are separate.

Deductions that lower both taxes

Business expenses reduce net profit, so they cut SE tax and income tax at the same time. Deductions taken on Schedule 1 instead — retirement contributions and health insurance — cut only income tax.

Retirement contributions. A SEP-IRA contribution for yourself is limited to 20% of net profit after subtracting half of SE tax (the "25% of compensation" rule works out to 20% for a sole proprietor), up to $72,000 for 2026. On $100,000 of profit, half of SE tax is $7,065, so the maximum SEP contribution is 20% × $92,935 = about $18,587. A solo 401(k) adds an employee deferral of up to $24,500 (plus catch-ups at 50+) on top of the employer contribution — see the solo 401(k) calculator and the self-employed retirement limits guide. Enter your contribution and health premiums in the calculator's Schedule 1 field to see the effect.

More worked examples (single, 2026, no state tax)

At $150,000 of revenue, the $120,055 of net earnings is still under the $184,500 wage base, so the full 15.3% applies. Above roughly $200,000 of profit, the Social Security part stops and SE tax grows only at 2.9% (plus 0.9% Additional Medicare above the threshold). That is also the range where an S corporation election starts to be worth comparing.

Reading your results

• Total self-employment tax is the Schedule SE figure; half of it appears as a deduction.
• Additional Medicare Tax appears only when your net earnings plus wages pass your threshold.
• QBI deduction shows the 20% base and notes when the income limit is reducing it.
• Effective tax rate is the tax your 1099 income adds divided by gross 1099 income — the share to set aside from each client payment.
• Quarterly federal estimated payment excludes state tax and assumes any W-2 withholding covers your wages.

For a deeper explanation of recordkeeping, entity choice and deductions, read the 1099 tax guide for independent contractors.

A late 1040 is not the same as a Form 2210 estimated-tax penalty. The IRS Automatic Exemption from Penalty program, when it applies, covers failure-to-file and failure-to-pay on eligible original individual returns — not estimated-tax underpayment. If you received a failure-to-file or failure-to-pay notice, use the AEP eligibility checker before assuming First Time Abate or reasonable cause is the only path.