Finance · Self-Employment

Freelance Tax Calculator

Estimate your self-employment tax, federal income tax and quarterly payments as a freelancer or 1099 contractor. Enter your income and expenses for a fast 2026 estimate — free and no sign-up.

How the freelance tax calculator works

As a freelancer or 1099 contractor, you pay two kinds of federal tax on your earnings. This calculator estimates both, plus your quarterly payment, in four steps:

• Net profit = gross freelance income − business expenses. This is what you actually earned after costs.
• Self-employment (SE) tax = net profit × 92.35% × 15.3%. The 15.3% is 12.4% Social Security plus 2.9% Medicare. You pay both the employer and employee halves because you are both.
• Federal income tax — calculated on your taxable income, which is net profit minus half of your SE tax (deductible) minus the standard deduction, using 2026 progressive brackets.
• Quarterly payment = (SE tax + income tax) ÷ 4. Freelancers must pay estimated taxes four times a year.

The formula in full: Net profit = Gross − Expenses; SE tax = Net profit × 0.9235 × 0.153; Taxable income = Net profit − (SE tax ÷ 2) − Standard deduction; Total tax = SE tax + Income tax.

2026 federal income tax brackets (single)

Things to keep in mind

Half of your SE tax is deductible

The IRS lets you deduct half of your self-employment tax when figuring your income tax. This calculator applies that deduction automatically, so your taxable income is lower than your net profit. It is one of the most valuable freelancer deductions.

This estimate excludes state tax, QBI and retirement

This calculator covers federal SE tax and federal income tax only. It does not include state income tax, the 20% Qualified Business Income (QBI) deduction, SEP-IRA or Solo 401(k) contributions, or tax credits — all of which can significantly change your final bill. Track expenses carefully and consider a SEP-IRA to lower your taxable income.

Frequently asked questions

Understanding self-employment tax in plain English

When you work a regular W-2 job, your employer quietly handles a big chunk of your taxes. They withhold income tax from each paycheck and they split the cost of Social Security and Medicare with you — you pay half through FICA, they pay the other half. When you go freelance, that hidden second half lands squarely on your shoulders. That is what self-employment (SE) tax is: you are now both the employer and the employee, so you pay both halves.

The combined rate is generally 15.3%, made up of 12.4% for Social Security and 2.9% for Medicare. There is a nuance that softens the blow slightly: SE tax applies to roughly 92.35% of your net profit, not the full amount, which is the IRS's way of mirroring the employer-side deduction that W-2 workers effectively get. The Social Security portion only applies up to an annual wage base limit that the IRS adjusts each year, while the Medicare portion has no cap and a small additional surtax can apply at high incomes. Because these thresholds change annually, treat the 15.3% as a solid working estimate rather than an exact figure for every dollar.

1099 vs. W-2: why the tax feels so different

The single biggest surprise for new freelancers is the size of the tax bill, and it comes down to the difference between a 1099 and a W-2.

• W-2 employee: Taxes are withheld automatically from every paycheck. Your employer pays half of Social Security and Medicare. You typically file once a year and may even get a refund.
• 1099 contractor / freelancer: No taxes are withheld — you receive the full amount and owe tax later. You pay the full 15.3% SE tax yourself. You generally must send the IRS estimated payments four times a year.

The trade-off is real, but it is not all downside. As a 1099 worker you can deduct legitimate business expenses that W-2 employees usually cannot, and you have access to powerful retirement accounts. The key is to plan ahead so the quarterly bills don't catch you off guard.

Quarterly estimated taxes: don't get caught short

Because no employer is withholding on your behalf, the IRS expects you to pay as you earn through quarterly estimated taxes. These payments are typically due in mid-April, mid-June, mid-September, and mid-January of the following year. Miss them or underpay, and you can face an underpayment penalty even if you settle up fully at tax time.

A simple, practical system keeps most freelancers safe:

• Open a separate "tax" savings account. Every time a client pays you, immediately move a percentage into it — many freelancers use 25% to 35% of net profit as a rule of thumb.
• Pay from that account each quarter. When the deadline arrives, the money is already set aside, so a quarterly payment never feels like a shock.
• Use the safe-harbor rule. Generally, if you pay at least 100% of last year's total tax (110% for higher earners) in even quarterly installments, you can avoid underpayment penalties even if you end up owing more. Confirm current thresholds with a tax professional, since the percentages can change.

Divide your estimated annual tax by four to get a baseline quarterly amount — which is exactly what the calculator above does.

Deductions that lower your freelance tax bill

Every legitimate business expense you deduct reduces your net profit, which in turn lowers both your SE tax and your income tax. This is where good record-keeping pays for itself. Common deductible categories for US freelancers include:

To be deductible, the IRS requires an expense to be both ordinary (common in your line of work) and necessary (helpful and appropriate for your business). Keep receipts, log mileage, and separate business and personal spending — ideally with a dedicated business bank account — so the records hold up if you are ever asked to support them.

The QBI deduction and retirement accounts

Two larger levers can meaningfully cut what you owe, and neither is included in the simplified estimate above.

The Qualified Business Income (QBI) deduction

The QBI deduction can let many self-employed people deduct up to 20% of their qualified business income before calculating income tax. It phases out at higher income levels and excludes certain service businesses above those thresholds, and the rules are detailed — but for a lot of freelancers it is a substantial saving worth asking your tax preparer about.

Self-employed retirement accounts

Contributing to a SEP-IRA or a Solo 401(k) does double duty: it builds your retirement savings and reduces your taxable income today. These accounts allow much higher contribution limits than a standard IRA precisely because you wear both the employer and employee hats. Funding one before the filing deadline is one of the most effective last-minute moves to lower a freelance tax bill.

Why bookkeeping matters more than you think

Taxes for the self-employed are only as accurate as your records. Without clean books you will overpay (by missing deductions you forgot to track) or underpay (by losing sight of how much you actually earned). A lightweight monthly routine — categorizing income and expenses, reconciling your business account, and updating your estimated-tax savings — turns tax season from a panic into a formality. Many freelancers use simple accounting software or a spreadsheet; the tool matters less than the consistency.

Frequently asked questions about freelance taxes