How 1099 income is taxed
When you work for yourself, no one takes tax out of your pay. You owe two federal taxes on your profit (your income minus business expenses):
- Self-employment tax: 15.3% — 12.4% for Social Security and 2.9% for Medicare. It applies to 92.35% of your profit, and the Social Security part stops at the 2026 wage base of $184,500 (including any W-2 wages).
- Income tax — the same 10%–37% brackets as everyone else, after your deductions.
You get some of it back through deductions: half of your self-employment tax, the standard deduction ($16,100 for single filers in 2026) and, for most freelancers, the 20% qualified business income (QBI) deduction.
How much should I set aside?
The calculator shows the exact share of your freelance income that goes to federal tax. For many freelancers it lands between 20% and 30%. Move that share of every payment into a separate savings account the day it arrives, and pay it in four quarterly estimated payments.
State income tax is extra in most states. If you live in a state with income tax, set aside a few percent more.
What changed for 2026
- Businesses now send a 1099-NEC only once they've paid you $2,000 or more in a year (up from $600). You must still report every dollar you earn, with or without a form.
- The Social Security wage base rose to $184,500.
- The QBI deduction is now permanent, with a new $400 minimum for anyone with at least $1,000 of qualified business income.
- New tax brackets and a higher standard deduction apply.
See how we calculate for every number and rule we use.
Frequently asked questions
What is a 1099 tax calculator?
It estimates the federal tax you owe on income reported on Forms 1099-NEC, 1099-K or 1099-MISC — that is, income from freelancing, contracting and gig work, where no tax was withheld.
What counts as business expenses?
Costs that are ordinary and necessary for your work: software, equipment, a home office, business mileage, phone and internet (the business share), professional fees and similar. Enter your total expenses and the calculator subtracts them from your income.
I also have a regular job. Does that change anything?
Yes. Enter your W-2 wages and the tax already withheld from your paychecks. Your wages can push your freelance income into a higher bracket, and they count toward the Social Security wage base.
Is this the same as self-employment tax?
Self-employment tax is one part of what you owe. This calculator shows it separately, along with your federal income tax and the total.
Does it include state tax?
Not yet. It covers federal tax only. State calculators for the biggest freelancer states are coming.
Is this tax advice?
No. It's an estimate based on the 2026 IRS figures and common situations. For your actual return, use tax software or a tax professional.