If you receive 1099 income (independent contracting, freelancing, gig work, or side business), use this to estimate your total federal tax and how much to set aside from each payment.
Set aside this much from every dollar of 1099 income
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Total tax owed (annual)
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Quarterly estimated payment
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SE tax (Social Security + Medicare)
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Federal income tax
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Net (after-tax) income
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QBI deduction
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When are 2026 quarterly taxes due?
- Q1 (Jan–Mar income): April 15, 2026
- Q2 (Apr–May income): June 15, 2026
- Q3 (Jun–Aug income): September 15, 2026
- Q4 (Sep–Dec income): January 15, 2027
Underpayment rules include several tests. A common prior-year safe harbor is 100% of prior-year tax, or 110% when prior-year AGI exceeded $150,000 ($75,000 if married filing separately), provided the prior return covered 12 months. The current-year 90% test and withholding also matter.
Why your tax bill is two taxes, not one
The shock for new freelancers is that there is no employer quietly removing money from each paycheck. You receive the gross, and you owe two distinct federal taxes on it. The first is self-employment tax, which combines 12.4 percent Social Security tax up to the annual wage base with 2.9 percent Medicare tax and, for some higher earners, Additional Medicare Tax. A W-2 worker splits the base Social Security and Medicare rates with an employer. The second tax is ordinary federal income tax, run through the same brackets everyone uses. This tool computes both, layers in the deductions Congress gives the self-employed, and then tells you the one number that matters operationally: what share of every invoice to wire into a separate tax account the day it clears.
It is aimed at independent contractors, 1099 gig workers, and single-member LLCs taxed as sole proprietors who report on Schedule C and Schedule SE. Enter net income, meaning gross receipts minus your deductible business expenses, because both taxes are calculated on profit, not revenue.
Walking $100,000 of contract income through the math
Take a single filer who invoices $100,000 and writes off $10,000 of legitimate expenses, leaving $90,000 of net profit, with the qualified business income deduction switched on. Self-employment tax applies to 92.35 percent of profit, so $83,115 is the base, and 15.3 percent of that is $12,717. Half of that SE tax, $6,358, is deductible above the line. The QBI deduction knocks off another 20 percent of $83,642, or $16,728. After the $16,100 standard deduction, taxable income is about $50,813, and the 2026 single brackets produce about $5,891 of income tax. Total estimated federal tax is about $18,608.
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Notice that self-employment tax, not income tax, is the heavier load at this income level. The chart makes the split obvious.
The interactive breakdown chart above the results updates live as you change your inputs and shows exactly this split for your numbers.
So is the rule of thumb wrong?
You will see advice everywhere to set aside 25 to 35 percent, yet this example lands at 18.6 percent of gross receipts. The 18.6 percent is the estimated federal number for a profitable solo filer who claims the full QBI deduction and has no state tax. The higher cushion exists because most people also owe state income tax, may not qualify for the full QBI break, and prefer a buffer over a surprise. My practical guidance: use the calculator as a federal estimate, then model your state and local rules separately rather than simply adding a headline marginal rate.
A simple system that keeps you out of trouble
The mechanics of owing tax four times a year sink more freelancers than the rate itself. My advice after years of watching clients scramble each April: open a separate high-yield savings account purely for taxes, and the day any client payment clears, move the calculator's percentage straight into it. You never see that money as spendable, the quarterly estimate is already sitting there when the deadline arrives, and you earn a little interest in the meantime. The safe-harbor rule is your backstop: a qualifying prior-year safe-harbor amount, often 100 percent of last year's total tax or 110 percent when prior-year AGI exceeded $150,000 ($75,000 for MFS). Income that arrives unevenly, a common reality for contractors, can use the annualized installment method on Form 2210 so you are not penalized for a strong fourth quarter.
Reader questions
Do I still owe self-employment tax if I have a regular W-2 job too?
Yes, but the Social Security portion coordinates. Once your combined W-2 wages and net self-employment earnings reach the $184,500 wage base for 2026, no more Social Security tax applies, though the 2.9 percent Medicare piece keeps going with no ceiling. Enter your W-2 wages in the tool and it adjusts the cap automatically.
Can a Solo 401(k) lower this bill?
It lowers your income tax, not your self-employment tax. SE tax is figured before retirement contributions, so a Solo 401(k) or SEP-IRA can shrink taxable income and the bracket tax without reducing the Schedule SE earnings base. Enter the contribution in the retirement field to see the income-tax reduction.
What records should I keep for the expenses I deduct?
Keep receipts, a mileage log if you drive for work, and bank or card statements that tie each expense to the business. The IRS expects contemporaneous records, not a reconstruction built the week before an audit. Sloppy documentation is the fastest way to lose deductions you genuinely earned.