1099 Tax Calculator

The 15.3% self-employment (SE) tax is the SECA equivalent of payroll FICA, paid on 92.35% of your Schedule C net profit. It splits into two pieces: 12.4% goes to Social Security (Old-Age, Survivors, and Disability Insurance) and 2.9% goes to Medicare (Hospital Insurance). A W2 employee splits both halves with the employer, while a 1099 earner pays both sides. The 0.9235 base factor lets you back out the employer-equivalent half before applying the rate, so you do not pay tax on the employer share you do not actually receive. Then you deduct half of the SE tax on Schedule 1 Line 15 against income tax, which softens the headline 15.3% once federal brackets enter the picture.

Section 199A lets many self-employed people deduct up to 20% of qualified business income (QBI). For this estimate, QBI starts with Schedule C net profit and subtracts the deductible half of self-employment tax. The deduction is also capped at 20% of taxable income computed before QBI. This calculator does not model the higher-income W-2 wage, qualified-property, or specified-service-trade limits, so your actual deduction can be lower.

Estimated-tax installments depend on more than this calculator's projected liability. Form 1040-ES also uses expected withholding and refundable credits, while safe-harbor calculations can depend on prior-year tax and adjusted gross income. This calculator therefore does not divide liability by four or recommend a payment amount. Use Form 1040-ES or a tax professional to calculate installments, especially when income is uneven.

The Social Security wage base is per person, not per income source. For 2026 it is $184,500, so once your combined W2 box 3 wages plus 92.35% of your Schedule C profit cross that ceiling, you stop paying the 12.4% Social Security portion. Your employer keeps withholding their 6.2% on every W2 dollar (up to the cap), and your SE tax is reduced by whatever portion of the cap your W2 wages already filled. A 1099 worker with $200k of W2 wages and a side business pays zero Social Security tax on the side gig, only the 2.9% Medicare portion. If you had two W2 jobs that combined exceeded the cap, the excess Social Security withheld would come back as a credit on Schedule 3 Line 11.

The classic break-even is around $40k to $80k of net self-employment profit, depending on how much you would pay yourself as a reasonable W2 salary. As an S-corp you split your income into a salary (subject to FICA at 15.3%) and pass-through distributions (not subject to SE tax), so the savings come from shrinking the FICA-eligible portion. The catch is real cost: payroll service (about $500 to $1,200 a year), a separate corporate tax return (Form 1120-S), state franchise or annual fees ($800 in California, $300 in Delaware), and a higher audit profile if your salary is unreasonably low. Most accountants suggest waiting until net profit reliably exceeds $50k before electing S-corp status, and re-running the math each year as your income changes. The QBI deduction also gets more complex with S-corp wages, so consult a CPA before filing Form 2553.