Free self employment tax calculator — calculate 1099 taxes for freelancers, gig workers, and small business owners
This free self employment tax calculator (also a 1099 tax calculator) helps freelancers, gig workers, and small business owners figure out exactly how much tax they owe. One of the biggest surprises for new freelancers is the 15.3% self employment tax on top of regular income tax.
Whether you're a Uber driver, freelance writer, Etsy seller, or consultant, this calculator shows you exactly what to set aside for taxes.
When you're a W-2 employee, your employer pays half of your Social Security and Medicare taxes. But when you're self-employed, you pay both halves — that's the 15.3% self employment tax:
As a 1099 worker, you don't have taxes withheld from your paycheck. You need to pay estimated taxes every quarter:
Underpaying can result in IRS penalties!
The best way to lower your self employment tax is to maximize deductions and contribute to retirement accounts:
If you owe more than $1,000 in taxes when you file your return, the IRS will charge you an underpayment penalty. To avoid this, you need to pay 100% of last year's tax liability (or 110% if you earn over $150k) through quarterly estimated taxes.
The penalty is about 3-5% interest on the underpaid amount per year. It's not huge, but it's annoying — and easily avoidable!
A general rule of thumb: set aside 25-30% of your 1099 income for taxes. Use this calculator with your exact numbers to be precise. If you're in a high tax state (California, New York), you might need 30-35%.
15.3% on net self employment income: 12.4% Social Security (up to $168,600) + 2.9% Medicare (no cap). High earners pay an additional 0.9% Medicare surtax above $200k.
No! You only owe self employment tax if your net self employment income is $400 or more. Below that, you don't have to file a Schedule SE.
Yes! You can deduct 50% of your self employment tax as an adjustment to income. This lowers your adjusted gross income (AGI) and therefore your regular income tax.
The IRS will charge you an underpayment penalty (about 3-5% annual interest) on the amount you should have paid each quarter. It's not the end of the world, but it's avoidable.
No! Self employment tax (15.3%) is for Social Security and Medicare. On top of that, you pay regular federal income tax (10-37%) and state income tax (0-13.3%). Total tax can be 25-40% of your net income.
No — you pay SE tax on 92.35% of your net self employment income (after business deductions). That's a small built-in deduction.
Legally, you can reduce it by maximizing business deductions and contributing to retirement accounts. But you can't avoid it entirely — it's the cost of being your own boss!