1099 Tax Calculator
Enter your net 1099 income and your estimated effective income-tax rate to see your self-employment tax, income tax, total tax, and what to set aside each quarter. Figures are an estimate before deductions and credits.
How to calculate 1099 tax
As a 1099 contractor you owe self-employment tax (Social Security and Medicare, 15.3%) plus income tax. Self-employment tax applies to 92.35% of your net earnings. You can deduct half of it before income tax, so income tax is charged on your net income minus that deduction, at your effective rate. Adding the two gives your total, which is typically paid in four quarterly estimated payments. This is a simplified estimate: it ignores the Social Security wage cap, the standard deduction, credits, and state tax.
SE tax = net x 0.9235 x 0.153; income tax = (net - SE tax / 2) x rate; total = SE tax + income tax
Worked example
You net $60,000 from 1099 work and estimate a 12% effective income-tax rate.
- Self-employment tax: $60,000 x 0.9235 x 0.153 = about $8,478
- Deduction: half of SE tax = about $4,239
- Income tax: ($60,000 - $4,239) x 0.12 = about $6,691
- Total tax: $8,478 + $6,691 = about $15,169
- Per quarter: $15,169 / 4 = about $3,792
Result: Set aside roughly $15,169 for the year, about $3,792 each quarter.
Frequently asked questions
How much should I set aside for 1099 taxes?
A common rule of thumb is 25% to 30% of net income, but it depends on your tax bracket and state. This calculator gives a tailored figure by combining self-employment tax (15.3%) with your estimated income-tax rate. Setting money aside each time you get paid avoids a large bill at filing time.
What is self-employment tax?
It is the Social Security and Medicare tax that employees and employers normally split. As a 1099 worker you pay both halves, 15.3% total, on 92.35% of your net earnings. You can deduct half of it when calculating income tax, which this estimate already does.
Do I have to pay quarterly?
If you expect to owe $1,000 or more, the IRS generally requires quarterly estimated payments to avoid an underpayment penalty. The calculator divides your estimated annual tax by four as a starting point. Due dates fall in April, June, September, and January.
Is this estimate exact?
No. It is a planning estimate that ignores the standard deduction, tax credits, the Social Security wage cap, retirement contributions, and state tax. Your actual liability can be lower after deductions. Use it to size your set-aside, then confirm with tax software or a professional.