The self-employment tax
When you're paid on a 1099 you cover both halves of Social Security and Medicare yourself — that's the 15.3% self-employment tax (12.4% Social Security up to the 2026 wage base of $184,500, plus 2.9% Medicare). It's calculated on 92.35% of your net profit.
The catch: you owe the 15.3% SE tax even if your income tax is $0. Being 1099 doesn't make you tax-free — it makes you responsible for the taxes an employer would normally withhold.
Then income tax, on top
On top of SE tax you owe regular federal income tax on your profit — but you get to deduct half of your SE tax first, and you can subtract the standard deduction and any credits. Your total is SE tax + income tax.
It's due quarterly
The IRS expects estimated payments four times a year, not one lump sum in April. The 2026 due dates are roughly April 15, June 15, September 15, and January 15 of the following year. Missing them can trigger an underpayment penalty.
Do this: set aside a percentage of every payment you receive — often around 25–30% — into a separate account, and pay it on the four dates. That turns a scary April bill into an automatic habit.
Calculate your 1099 tax + quarterly payments →
Free tool: your total federal tax, split into the four quarterly payments with due dates.