1099 Tax Calculator
Estimate what you’ll owe on freelance or contractor income for the 2025 tax year — self-employment tax, federal income tax and the quarterly payment to set aside.
Reviewed by the CalcCafe editorial team · Last updated 18 July 2026 · How we test our tools
Example
A single freelancer bills $80,000 on 1099s and has $12,000 of business expenses, leaving $68,000 of net self-employment profit. SE tax applies to 92.35% of that ($62,798): 15.3% comes to $9,608. Taxable income is then $68,000 − $4,804 (half the SE tax) − $15,000 (2025 standard deduction) = $48,196, producing federal income tax of about $5,545. Total federal bill: $15,153 — an effective 22.3% of net profit — or about $3,788 per quarterly estimated payment. State income tax would be extra.
How it works
Net profit = gross 1099 income − business expenses. Self-employment tax is charged on 92.35% of net profit: 12.4% Social Security on that base up to the 2025 wage cap of $176,100, plus 2.9% Medicare on all of it. Taxable income = net profit − half the SE tax − the 2025 standard deduction ($15,000 single, $30,000 married filing jointly). Federal income tax is then applied through the 2025 brackets (10% to 37%; married thresholds are double the single ones). Total tax = SE tax + income tax, and the quarterly estimate is one quarter of that.
Good to know
You typically receive a 1099-NEC from each client that paid you $600 or more for services as a non-employee, and a 1099-K from payment platforms and marketplaces once their reporting threshold is met. Either way, the form is informational — you owe tax on all self-employment income whether or not a form arrives. Unlike a W-2 job, nothing has been withheld, so the full bill lands on you at filing time unless you pay as you go.
Self-employment tax is the piece that surprises new freelancers. Employees split Social Security and Medicare with their employer (7.65% each); when you’re self-employed you pay both halves — 15.3% — yourself. The law softens this two ways: only 92.35% of net profit is subject to SE tax (mirroring the employer-half exclusion), and you deduct half the SE tax from income before computing income tax. Social Security’s 12.4% portion stops at $176,100 of earnings in 2025; the 2.9% Medicare portion has no cap, and an extra 0.9% Medicare surtax applies above $200,000 ($250,000 joint), which this tool does not model.
The IRS expects payment through the year via Form 1040-ES estimated payments, due roughly April 15, June 15, September 15 and January 15 of the following year. Underpay and you owe an interest-based penalty even if you settle in full in April. Safe harbors help: pay at least 90% of this year’s tax or 100% of last year’s (110% if your prior-year AGI topped $150,000) and you avoid the penalty. The quarterly figure shown here is simply the annual estimate divided by four — front-load it if your income is lumpy.
This is a federal-only planning estimate. It excludes state and local income tax (0% in Texas or Florida, over 10% at the top in California), and it also ignores the Qualified Business Income (QBI) deduction, which can trim up to 20% off qualifying pass-through income and materially lower the income-tax portion — so many freelancers will owe somewhat less than shown. It assumes the standard deduction rather than itemizing, and no other income, credits, or retirement contributions. Deductible expenses are your lever: home office, equipment, software, professional services, business mileage, health insurance premiums and solo-401(k)/SEP-IRA contributions all reduce the taxable base — keep records for each.
Frequently asked questions
What is the self-employment tax rate for 2025?
15.3% — 12.4% Social Security plus 2.9% Medicare — applied to 92.35% of your net self-employment profit. The Social Security portion stops at $176,100 of earnings in 2025; Medicare has no cap. You then deduct half the SE tax from income before income tax is figured.
Do I have to pay quarterly estimated taxes on 1099 income?
Generally yes, if you expect to owe $1,000 or more for the year. Payments are made with Form 1040-ES, due mid-April, mid-June, mid-September and mid-January. Paying at least 90% of the current year's tax or 100% of last year's (110% for higher incomes) protects you from the underpayment penalty.
Does this calculator include state income tax?
No — it estimates federal self-employment tax and federal income tax only. State and local income taxes range from zero in states like Texas and Florida to over 10% in top brackets elsewhere, so budget for them separately if your state levies one.
Is my data uploaded anywhere?
No — this calculator runs entirely in your browser. Your income and expense figures never leave your device, and it is completely free with no sign-up.
People also ask
How much should I set aside for taxes on 1099 income?
A common rule of thumb is 25–30% of net profit for federal taxes at moderate incomes — the example on this page works out to about 22% federal — plus whatever your state charges. Setting aside 30% into a separate account as you get paid covers most freelancers comfortably.
What expenses can I deduct as a 1099 contractor?
Ordinary and necessary business costs: home office, computers and equipment, software subscriptions, business mileage or vehicle expenses, phone and internet (business share), professional fees, insurance, advertising, and contract labor. Self-employed health insurance premiums and SEP-IRA or solo-401(k) contributions are deducted separately and also reduce your bill.
What is the 92.35% factor in self-employment tax?
SE tax is charged on 92.35% of net profit rather than 100%. The 7.65% haircut mirrors the employer half of FICA that a W-2 worker's employer pays and the worker never sees, keeping the self-employed base roughly comparable to an employee's wage base.
How much tax will I pay on a 1099?
On 1099 income you owe two federal taxes: self-employment tax of 15.3% on 92.35% of your net profit, plus regular income tax on what remains after half the SE tax and your standard deduction. In the example above, $68,000 of net profit produces about $9,608 of SE tax and $5,545 of income tax, $15,153 in total or roughly 22% of profit. State income tax is extra, and the exact figure depends on your deductions and filing status; this is general information, not tax advice.
Is it better to be a 1099 employee or W-2?
A W-2 employee has taxes withheld, the employer pays half of Social Security and Medicare, and benefits like health insurance and paid leave are often included. A 1099 contractor pays the full 15.3% self-employment tax, handles quarterly estimates and buys their own benefits, but can deduct business expenses and often has more control over rates and hours. Because of the extra tax and missing benefits, a 1099 rate needs to be noticeably higher than a W-2 salary to come out even; this is general information, not advice.
What is a good hourly rate for 1099?
A common rule is to charge 25% to 50% more than the equivalent W-2 hourly wage. Part of that gap is the extra 7.65% of Social Security and Medicare you pay yourself, and the rest covers health insurance, retirement contributions, unpaid time off, equipment and unbillable hours. For a $40-an-hour job, that points to roughly $50 to $60 an hour as a contractor; run your expected income through this calculator to see what you keep after tax.
How badly does a 1099 affect my taxes?
The main hit is self-employment tax: 15.3% on 92.35% of your net profit, on top of ordinary income tax, with nothing withheld along the way. In the page's example, $68,000 of net profit produces about $15,153 in federal tax, an effective 22.3%, compared with an employee who would pay only the 7.65% employee share of FICA. Deducting business expenses and half of the SE tax softens the blow, and paying quarterly estimates avoids penalties; this is general information, not tax advice.
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Sources & references
These tools follow our methodology and provide educational estimates only — verify important figures with a qualified professional.