Estimate self-employment tax plus federal income tax on 1099 income — and what to set aside each quarter.
Estimated total tax
$18,583
2025 federal estimate.
After $12,000 of expenses, your net profit is $78,000. That carries $11,021 of self-employment tax and $7,562 of federal income tax — $18,583 in total, or 23.8% of profit. You'd keep about $59,417. Uses 2025 federal rules; state tax is extra.
No one withholds tax from a 1099 payment, so the discipline has to be yours. Moving roughly 24% — about $4,646 per quarter — into a separate savings account as you get paid is what prevents a painful April. Many freelancers use 25–30% as a rule of thumb until they know their real rate.
Because business expenses reduce the profit that both self-employment tax and income tax are calculated on, each deductible dollar saves you roughly 24% — far more than a personal deduction. Home office, equipment, software, mileage, professional development and health insurance premiums are commonly missed. Good record-keeping is one of the highest-return habits in freelancing.
The IRS expects estimated payments four times a year, not one lump at filing. Work out what each quarterly payment should be to avoid underpayment penalties.
Quarterly tax calculatorWorked scenarios with the full analysis, so you can see how the numbers move before entering your own.
A full-time freelancer with typical business deductions.
Estimated total tax
$18,583
After $12,000 of expenses, your net profit is $78,000. That carries $11,021 of self-employment tax and $7,562 of federal income tax — $18,583 in total, or 23.8% of profit. You'd keep about $59,417. Uses 2025 federal rules; state tax is extra.
No one withholds tax from a 1099 payment, so the discipline has to be yours. Moving roughly 24% — about $4,646 per quarter — into a separate savings account as you get paid is what prevents a painful April. Many freelancers use 25–30% as a rule of thumb until they know their real rate.
Because business expenses reduce the profit that both self-employment tax and income tax are calculated on, each deductible dollar saves you roughly 24% — far more than a personal deduction. Home office, equipment, software, mileage, professional development and health insurance premiums are commonly missed. Good record-keeping is one of the highest-return habits in freelancing.
1099 income stacked on top of salary, taxed at a higher marginal rate.
Estimated total tax
$17,921
After $3,000 of expenses, your net profit is $22,000. That carries $3,109 of self-employment tax and $14,812 of federal income tax — $17,921 in total, or 81.5% of profit. You'd keep about $4,079. Uses 2025 federal rules; state tax is extra.
No one withholds tax from a 1099 payment, so the discipline has to be yours. Moving roughly 81% — about $4,480 per quarter — into a separate savings account as you get paid is what prevents a painful April. Many freelancers use 25–30% as a rule of thumb until they know their real rate.
Because business expenses reduce the profit that both self-employment tax and income tax are calculated on, each deductible dollar saves you roughly 81% — far more than a personal deduction. Home office, equipment, software, mileage, professional development and health insurance premiums are commonly missed. Good record-keeping is one of the highest-return habits in freelancing.
A joint filer with substantial deductible business costs.
Estimated total tax
$23,733
After $40,000 of expenses, your net profit is $110,000. That carries $15,543 of self-employment tax and $8,190 of federal income tax — $23,733 in total, or 21.6% of profit. You'd keep about $86,267. Uses 2025 federal rules; state tax is extra.
No one withholds tax from a 1099 payment, so the discipline has to be yours. Moving roughly 22% — about $5,933 per quarter — into a separate savings account as you get paid is what prevents a painful April. Many freelancers use 25–30% as a rule of thumb until they know their real rate.
Because business expenses reduce the profit that both self-employment tax and income tax are calculated on, each deductible dollar saves you roughly 22% — far more than a personal deduction. Home office, equipment, software, mileage, professional development and health insurance premiums are commonly missed. Good record-keeping is one of the highest-return habits in freelancing.
Modest first-year income, where SE tax dominates the bill.
Estimated total tax
$5,546
After $5,000 of expenses, your net profit is $30,000. That carries $4,239 of self-employment tax and $1,307 of federal income tax — $5,546 in total, or 18.5% of profit. You'd keep about $24,454. Uses 2025 federal rules; state tax is extra.
No one withholds tax from a 1099 payment, so the discipline has to be yours. Moving roughly 18% — about $1,387 per quarter — into a separate savings account as you get paid is what prevents a painful April. Many freelancers use 25–30% as a rule of thumb until they know their real rate.
Because business expenses reduce the profit that both self-employment tax and income tax are calculated on, each deductible dollar saves you roughly 18% — far more than a personal deduction. Home office, equipment, software, mileage, professional development and health insurance premiums are commonly missed. Good record-keeping is one of the highest-return habits in freelancing.
Freelance income carries two separate federal taxes. First, self-employment tax at 15.3% covers Social Security and Medicare — as your own employer, you pay both halves rather than splitting with a company. Second, ordinary federal income tax applies to your profit like any other income. Together they commonly total 25–35% of profit before any state tax.
The other shock is timing. A W-2 employee has tax withheld from every paycheck automatically; a 1099 contractor receives the full amount and owes tax later. Without deliberately setting money aside, the bill arrives all at once. This is the single most common reason new freelancers get into trouble with the IRS.
Because both self-employment tax and income tax are calculated on net profit, every legitimate business expense saves you the combined rate — often 30% or more per dollar. That's a far better return than most personal deductions, and it's why disciplined record-keeping matters so much for the self-employed.
Commonly missed deductions include the home office (a specific square-footage or simplified calculation), business mileage, software and subscriptions, professional development, a portion of your phone and internet, and self-employed health insurance premiums. Retirement contributions through a SEP-IRA or Solo 401(k) reduce income tax on your profit as well, though not the SE tax — and they let the self-employed shelter far more than a standard IRA allows.
Nothing is withheld from 1099 payments. Move 25–30% to a separate account as you're paid, before it feels like spendable income.
Many new freelancers budget only for income tax and are blindsided by an extra 15.3%.
Every deductible dollar saves ~30% in combined tax. Missing deductions is expensive; track them from day one.
Underpayment penalties apply even if you pay in full at filing. Pay estimates on schedule.
SEP-IRAs and Solo 401(k)s let the self-employed shelter far more than a regular IRA, cutting income tax on profit.
Typically 25–35% of net profit federally, combining 15.3% self-employment tax with ordinary income tax, before any state tax. On $78,000 of profit, that's roughly $22,000. The exact amount depends on your filing status, other income and deductions — enter your numbers above for an estimate.
A common rule of thumb is 25–30% of your net profit, moved to a separate savings account as you get paid. This calculator gives your specific percentage. Setting money aside from each payment — rather than hoping it's there at filing — is the habit that separates freelancers who stay current from those who fall behind.
It's Social Security and Medicare tax for people who work for themselves, at a combined 15.3% applied to 92.35% of net profit. Employees split these with their employer at 7.65% each; the self-employed pay both halves. Half of the resulting SE tax is deductible against your income tax as a partial offset.
Yes — claim every legitimate business expense, since each one reduces the profit both taxes are based on, saving you roughly 30% per dollar. Beyond that, contributing to a SEP-IRA or Solo 401(k) reduces income tax on your profit. At higher incomes, an S-corporation election can reduce SE tax, though it adds complexity.
Generally yes, if you expect to owe $1,000 or more. The IRS expects estimated payments in April, June, September and January rather than a single payment at filing. Skipping them triggers underpayment penalties even if you pay in full at tax time.
The next calculations that usually follow this one.
Work out what to send the IRS each quarter so you avoid underpayment penalties and an April surprise.
Estimate the Social Security and Medicare tax on your business profit — the extra 15.3% W-2 workers never see.
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Federal tax, FICA, state tax and deductions — see exactly what lands in your account.
See what your contributions and your employer's match grow into — and whether you're leaving free money on the table.
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