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Estimate federal income tax and self-employment tax for US 1099 contractors and freelancers. Calculate quarterly estimated payments to avoid IRS underpayment penalties.
1099 contractors and freelancers do not have taxes withheld by employers, so the IRS requires them to pay self-employment tax (15.3% on net earnings up to the Social Security wage base, then 2.9% above it) in addition to federal income tax. This calculator takes your gross 1099 income, subtracts allowable business expenses to arrive at net profit, deducts half of self-employment tax (as permitted by the IRS), then applies the appropriate 2024/2025 federal income tax bracket for your filing status. The output shows your total tax liability split between self-employment tax and income tax, your effective combined rate, net after-tax income, and the quarterly estimated payment amount you should send to the IRS each April, June, September, and January to avoid underpayment penalties.
Self-employment tax covers Social Security (12.4%) and Medicare (2.9%), totaling 15.3% on net earnings up to the Social Security wage base ($168,600 for 2024). Employees split this with their employer, but 1099 contractors pay the full amount. The IRS allows you to deduct half of self-employment tax from your taxable income to partially offset this.
The IRS requires most self-employed people to pay taxes quarterly (April 15, June 15, September 15, January 15) to avoid underpayment penalties. Your quarterly payment is roughly your total annual tax liability divided by four. This calculator shows your estimated quarterly amount based on your income, expenses, and filing status.
Common deductible expenses include home office costs (proportional to workspace), business equipment and software, professional subscriptions, vehicle mileage for business travel, health insurance premiums, retirement contributions (SEP-IRA, Solo 401k), and professional development. Keep receipts for everything - the IRS may require documentation.
No. This calculator covers federal self-employment tax and federal income tax only. State income tax rates vary from 0% (Texas, Florida, Nevada, etc.) to over 13% (California). Add your state's rate to get your total tax burden.
Net profit is your gross 1099 income minus business expenses. Taxable income is lower - it's net profit minus half of your self-employment tax (an IRS deduction) and minus your standard or itemized deduction. Federal income tax brackets apply to taxable income, not gross income.
Have more questions? These calculators provide estimates for educational purposes only. For personalized financial advice, consult with a qualified financial professional. See our disclaimer for more information.