Calculate federal income tax and self-employment tax on 1099 contractor income. Enter your 1099 payments and business expenses for a complete tax estimate.
How to Use This 1099 Tax Calculator
Enter all your 1099 income from all sources (clients, platforms, etc.), then enter your business expenses β any ordinary and necessary costs of running your business. The difference is your net profit, which is subject to both income tax and self-employment tax.
Add any W-2 wages if you also have a day job β this affects your SS wage base. Enter self-employed health insurance premiums to reduce your AGI.
The Formula
Net Profit = 1099 Income β Business Expenses
SE Tax = Net Profit Γ 0.9235 Γ 15.3% (SS up to $176,100 cap)
AGI = Net Profit β (SE Tax Γ· 2) β Health Insurance
Taxable Income = AGI β Standard Deduction
Total Tax = Federal Income Tax + SE Tax
Example
Jordan, 1099 contractor, single, $90K income, $15K expenses in 2025:
Net profit: $90,000 β $15,000 = $75,000
SE tax: $75,000 Γ 0.9235 Γ 15.3% = $10,610
AGI: $75,000 β $5,305 = $69,695
Taxable income: $69,695 β $15,000 = $54,695
Federal income tax: ~$7,926 | Total: $18,536
Frequently Asked Questions
What taxes do 1099 contractors pay?
1099 contractors pay federal income tax on their net profit (income minus expenses), plus self-employment tax (15.3%) which covers Social Security and Medicare. Unlike W-2 employees, no taxes are withheld from 1099 payments β you must make quarterly estimated payments to avoid penalties.
What business expenses can I deduct as a 1099 contractor?
Common deductible expenses include home office costs, business equipment, software subscriptions, professional development, health insurance premiums (100% deductible above the line), business travel, vehicle mileage at $0.70/mile, phone and internet (business portion), and professional services like accounting.
How does the QBI deduction work for 1099 income?
The Qualified Business Income (QBI) deduction allows most self-employed individuals to deduct up to 20% of their qualified business income from taxable income. For 2025, this deduction phases out for specified service trades at $197,300 (single) / $394,600 (married). This calculator does not include QBI as it requires detailed business type analysis.
Do I owe taxes if I receive a 1099-NEC?
Receiving a 1099-NEC means the payer reports your income to the IRS. You owe taxes on the net profit (after allowable expenses) β both income tax and self-employment tax. Even if you don't receive a 1099 (income under $600 from one payer), you still must report and pay tax on all self-employment income.
What is the difference between 1099-NEC and 1099-MISC?
1099-NEC (Nonemployee Compensation) reports freelance/contractor payments for services. 1099-MISC covers other income types like rent, royalties, and prizes. Both are subject to income tax; 1099-NEC income is also subject to self-employment tax if net earnings exceed $400.