1099 Tax Calculator for Freelancers

Example Calculation

A freelancer in Texas bills $85,000 and has $10,000 of business expenses, so net profit is $75,000.

Self-employment tax is about $10,597. Half of it is deductible, and the 20% business income deduction lowers the taxable amount further, so federal income tax comes to about $4,898. The total is about $15,495 for the year, or 21% of profit. That is roughly $3,874 for each quarterly payment. A safe habit is to move 25% to 30% of every payment into a tax savings account.

How It Works

When you earn 1099 income, no employer withholds tax for you, so you are responsible for paying both halves of Social Security and Medicare — known as self-employment tax — in addition to regular income tax. This estimator walks through each step so you can set money aside and make accurate quarterly payments.

First, subtract business expenses from gross 1099 income to get net profit. Self-employment tax applies to 92.35% of that profit: 12.4% for Social Security (up to the annual wage base) and 2.9% for Medicare. You can deduct half of the self-employment tax when calculating adjusted gross income. Next, the calculator subtracts the standard deduction for your filing status, optionally applies the 20% qualified business income (QBI) deduction, and runs the remaining taxable income through the 2026 federal brackets.

State tax is estimated with an average effective rate for your state, and the sum of self-employment, federal and state tax is divided by four to estimate each quarterly payment. Federal estimated payments are generally due April 15, June 15, September 15 and January 15 of the following year. If you underpay, the IRS may charge an underpayment penalty, so many freelancers aim to pay at least 90% of this year’s tax or 100% of last year’s.

The “set aside” percentage is a handy rule of thumb: move that share of every invoice into a separate savings account. This tool is a planning aid and ignores items like health-insurance deductions, retirement contributions, credits and phase-outs, so treat the output as an estimate and consider a tax professional for complex situations.

Formula Explained

Net profit = 1099 income − expenses

SE tax = 12.4% × min(0.9235 × profit, wage base) + 2.9% × 0.9235 × profit

Taxable income = profit − ½ SE tax − standard deduction − QBI deduction

Quarterly payment = (SE tax + federal tax + state tax) ÷ 4

Assumptions and limits

• Tax year 2026. Federal brackets and the standard deduction come from IRS Revenue Procedure 2025-32.
• Self-employment tax is 12.4% Social Security on the first $184,500 of net earnings plus 2.9% Medicare, both on 92.35% of net profit, and is only charged when net profit is $400 or more. The 0.9% Additional Medicare Tax is not included.
• Half of the self-employment tax is deducted from income, as the IRS allows.
• The 20% qualified business income deduction is applied in simplified form and ignores the income thresholds and the limits for specified service businesses. You can switch it off.
• State tax is an estimate from the state’s 2026 brackets and standard deduction, applied to net profit after half of the self-employment tax.
• Credits, health-insurance and retirement deductions, estimated payments you have already made and the safe-harbor rules are not included.
• The quarterly figure is the yearly total divided by four. The federal due dates shown are April 15, June 15 and September 15, 2026, and January 15, 2027.