1099 Tax Calculator
It adds self-employment tax to federal income tax on the same freelance profit, applies the QBI deduction, and divides the result into quarterly payments.
Total federal tax
$21,345
Net profit
$100,000
Self-employment tax
$14,130
Income tax
$7,216
QBI deduction
$20,000
Taxable income
$56,835
Take-home
$78,655
Set aside roughly 25% of each payment as it arrives. Quarterly estimates are generally due in April, June, September and January.
Federal estimate only, and not tax advice. State tax, QBI phase-outs and retirement plan deductions are not modelled — confirm with a tax professional.
What it calculates
It adds self-employment tax to federal income tax on the same freelance profit, applies the QBI deduction, and divides the result into quarterly payments.
Why it matters
Freelancers face two separate federal taxes on one pile of money. Budgeting for only one of them is the single most common cause of a painful April.
Who it's for
Independent contractors, consultants, gig workers and anyone paid on a 1099 rather than a W-2.
Formula
- R
- Gross revenue billed
- E
- Deductible business expenses
- SE
- Self-employment tax on net profit
- QBI
- Qualified business income deduction, up to 20%
Worked example
$120,000 billed with $20,000 of expenses
- 1Net profit = 120,000 − 20,000 = $100,000
- 2Self-employment tax = $14,129.55
- 3AGI = 100,000 − 7,064.78 deductible half
- 4QBI deduction of 20% cuts taxable income further
Roughly $27,000 of total federal tax, about $6,750 a quarter
How the 1099 tax calculator works
Net profit is taxed twice over at the federal level. First comes self-employment tax at 15.3% of net earnings, then income tax on what is left after half the self-employment tax is deducted. The qualified business income deduction can then remove up to 20% of business profit from taxable income, though it never reduces self-employment tax. Because nobody is withholding anything on your behalf, the total is due in quarterly estimated payments rather than in one April settlement, and the underpayment penalty applies even if you eventually pay in full.
Freelance profit is taxed twice over at the federal level: self-employment tax at 15.3% of net earnings, then income tax on what remains after half the self-employment tax comes off.
The QBI deduction can remove up to 20% of business profit from taxable income, but it never reduces self-employment tax. Nobody withholds any of this for you, so it is due quarterly.
Common mistakes
- Setting aside a flat 15% and discovering income tax is owed on the same money.
- Missing quarterly deadlines and taking an underpayment penalty on top of the tax.
- Expecting the QBI deduction to reduce self-employment tax, which it never does.
- Failing to track expenses, which reduce both taxes at once.
Tips and best practice
- Reserve 25–30% of every invoice on the day it is paid rather than at quarter end.
- Open a separate business account; it makes expense tracking and an audit far simpler.
- A retirement plan such as a SEP-IRA can shelter a large share of profit from income tax.
Frequently asked questions
How much tax do I pay on 1099 income?
You owe self-employment tax of 15.3% on net earnings plus federal income tax at your marginal rate. Combined, most freelancers should reserve 25–30% of profit.
How much should I set aside for taxes as a freelancer?
Around 25–30% of net profit is a reasonable working figure for most incomes, adjusted upward at higher earnings where more profit falls in higher brackets.
When are quarterly estimated taxes due?
Generally mid-April, mid-June, mid-September and mid-January. Paying late triggers an underpayment penalty even if the full amount is settled by the filing deadline.
What is the QBI deduction?
The qualified business income deduction removes up to 20% of business profit from taxable income. It reduces income tax only, never self-employment tax.
Do business expenses reduce my tax?
Yes, and unusually effectively. An expense reduces net profit, which lowers both self-employment tax and income tax on the same dollar.
Related calculators
Methodology & trust
- Formula source
- IRS Schedule C, Schedule SE and Section 199A guidance for 2026
- Last updated
- 2026-07-28
- Privacy
- Every calculation runs in your browser. No inputs are sent to a server or stored.