Estimate total tax liability for 1099 independent contractor income including federal, state, self-employment, and deductions.
This calculator takes your gross 1099 or freelance income, subtracts business expenses and standard deductions, then computes what you actually owe: self-employment tax (Social Security plus Medicare) on top of ordinary federal and state income tax. It's built for people whose income comes with no employer withholding. The most common surprise: self-employment tax stacks on top of income tax rather than replacing the payroll withholding a W-2 job would have handled, so contractors routinely underestimate what they owe by assuming their income tax bracket alone.
Net profit is multiplied by 92.35% to get net self-employment earnings, per IRS Schedule SE rules. That figure is taxed at 12.4% Social Security up to the annual wage base cap (adjusted yearly by the SSA) plus 2.9% Medicare with no cap, for a combined 15.3% before any income tax is applied. Half of this SE tax is then treated as an above-the-line deduction against income tax.
After subtracting the deductible half of SE tax, entered business expenses, and the standard deduction (or an itemized amount if provided), the remaining taxable income is run through the current federal marginal brackets for the selected filing status, then combined with a state tax estimate based on the state you select, to produce a total liability and blended effective rate.
No. It estimates your total annual tax liability, not the specific quarterly voucher amounts. To avoid an underpayment penalty you generally need to pay in either 90% of the current year's tax or 100-110% of last year's, in four roughly even installments; use the annual estimate here as an input to that calculation, not as the quarterly figure itself.
Because a W-2 employer pays half of Social Security and Medicare tax on your friend's behalf, while as a 1099 contractor you owe both the employee and employer share yourself as self-employment tax, on top of ordinary income tax. That's the 15.3% layer this calculator adds before it even gets to income tax brackets.
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