How the calculator works
- Profit: your 1099 income minus your business expenses (the figure on Schedule C).
- Self-employment tax: 15.3% of 92.35% of your profit (12.4% Social Security, up to the yearly wage base, and 2.9% Medicare), plus the 0.9% Additional Medicare Tax on high earnings. There’s none if your net earnings are under $400.
- Income tax: your profit, less half of your self-employment tax and any health insurance you pay, goes through the same federal and state rules as our paycheck calculator, including the standard deduction and the qualified business income deduction. A few states (Pennsylvania, New Jersey, Massachusetts, Alabama and Arkansas) don’t let you deduct half of self-employment tax, and Montana doesn’t allow the qualified business income deduction; the calculator follows those rules.
- New York City: if you live and run your business there, the city’s Unincorporated Business Tax (4% after an allowance for your own work and a $5,000 exemption, with a credit that cancels it for smaller businesses) and the MTA’s commuter tax (0.6% of all your net self-employment earnings once they’re over $150,000) are added. Part of the business tax comes back as a credit against city income tax.
- Set aside and quarterly payments: the total, split into four estimated payments.
If you also have a W-2 job, the calculator shows only the extra tax your 1099 income adds, since tax on your wages is already withheld from your paychecks.
How much to set aside
A single filer with no other income, in a state with no income tax, in 2026:
| Profit | Self-employment tax | Income tax | Set aside |
|---|---|---|---|
| $25,000 | $3,532 | $571 | $4,103 (16%) |
| $50,000 | $7,065 | $2,667 | $9,732 (19%) |
| $75,000 | $10,597 | $4,898 | $15,495 (21%) |
| $100,000 | $14,130 | $8,235 | $22,365 (22%) |
| $150,000 | $21,194 | $16,413 | $37,608 (25%) |
| $200,000 | $28,234 | $25,196 | $53,431 (27%) |
Self-employment tax takes about 14% of profit, and income tax comes on top, so the share to set aside rises with your profit. Add your state’s income tax if it has one: the calculator includes it.
Deductions that lower the tax
- Business expenses reduce both self-employment tax and income tax. Keep records of what you spend to run your business.
- Half of your self-employment tax is deducted from your income for income tax (not from self-employment tax itself).
- The qualified business income (QBI) deduction lets you deduct up to 20% of your business profit (after the deductions above) from taxable income, but no more than 20% of your taxable income. For 2026 it starts to shrink once taxable income passes $201,750 ($403,500 joint) and is phased down over the next $75,000 ($150,000 joint). Professional services such as consulting, health, law, accounting and finance lose it completely above that range. From 2026, anyone with at least $1,000 of income from a business they actively run gets at least $400.
- Self-employed health insurance: premiums you pay for yourself and your family can be deducted, as long as you aren’t eligible for an employer’s health plan. If you buy cover on the Marketplace, see what the premium tax credit pays with the ACA subsidy calculator; with a high-deductible plan, an HSA lowers your tax too.
Paying quarterly
Nobody withholds tax from 1099 income, so the IRS expects you to pay during the year. Federal payments go to the IRS (IRS Direct Pay is free), and most states with an income tax have their own estimated payments. Setting aside your “set aside” percentage from every payment you receive makes the quarterly bills painless. Our guide to quarterly estimated taxes has the dates and how to pay, and if this is a side business next to a job, see side hustle tax.
What this calculator doesn’t include
Retirement contributions (SEP-IRA or solo 401(k)), other income such as interest or rental income, itemized deductions and other city taxes on business profits (for example Philadelphia’s Net Profits Tax) are not included.