If you're a freelancer, independent contractor, or gig worker receiving 1099 income, you're responsible for self-employment (SE) tax in addition to regular income tax. Here's what you need to know for 2026.
What Is Self-Employment Tax?
SE tax is the self-employed person's equivalent of FICA taxes that W-2 employees and employers split. As a self-employed individual, you pay both halves: 12.4% for Social Security (on the first $184,500) plus 2.9% for Medicare = 15.3% total on your net self-employment income.
How to Calculate Your Tax
- Start with gross 1099 income
- Subtract business expenses (deductions)
- Multiply net income by 92.35% (the SE tax base)
- Calculate SE tax: 15.3% of the base
- Calculate federal income tax on your adjusted gross income
- Add state income tax if applicable
Quarterly Estimated Payments
Unlike W-2 employees who have taxes withheld each paycheck, self-employed individuals must make quarterly estimated payments to the IRS:
- Q1: April 15
- Q2: June 15
- Q3: September 15
- Q4: January 15 (following year)
Failing to pay quarterly estimates can result in underpayment penalties.
Key Deductions to Reduce Your Tax
- Half of SE tax (deductible on your 1040)
- Home office deduction
- Health insurance premiums (if self-employed)
- Business expenses (equipment, software, supplies)
- Vehicle expenses (standard mileage: 70 cents/mile in 2026)
- Retirement contributions (SEP IRA up to 25% of net income)
Use our 1099 tax calculator to estimate your quarterly payments.