Freelance and 1099 income carries both halves of Social Security and Medicare. Here's the real tax bill — and what to send the IRS each quarter.
Revenue minus business expenses (Schedule C line 31).
Most sole proprietors under the income thresholds qualify for the qualified business income deduction.
This self-employment tax calculator estimates the full tax bill on freelance and 1099 income — which carries both the employee and employer halves of Social Security and Medicare — plus federal income tax, then breaks it into quarterly estimated payments.
Self-employment tax applies 15.3% (12.4% Social Security up to the wage base, plus 2.9% Medicare) to 92.35% of your net profit, because the self-employed pay both the employee and employer halves of payroll tax. The calculator then estimates federal income tax after the deductible half of SE tax, the standard deduction, and the QBI deduction, and splits the total into quarterly estimated payments.
It applies 15.3% (12.4% Social Security up to the wage cap plus 2.9% Medicare) to 92.35% of your net self-employment earnings, on top of regular income tax.
The combined rate is 15.3%, because the self-employed pay both the employee and employer shares of payroll taxes that a W-2 worker splits with an employer.
Estimated payments are generally due in April, June, September, and the following January. Underpaying can trigger IRS penalties.
Employees split the 15.3% payroll tax with their employer. When you're self-employed you are both, so you owe the full amount — though half of it is deductible against income tax.
The qualified business income deduction lets many self-employed people deduct up to 20% of their business profit before income tax, subject to income limits. It can meaningfully lower the bill.
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