US Freelance Income Tax Estimator

How Freelance Income Taxes Work

As a freelancer or independent contractor receiving 1099 income, you are responsible for paying both income tax and self-employment (SE) tax. Unlike W-2 employees, no employer withholds taxes from your pay — so understanding your full tax burden is essential for financial planning.

Self-Employment Tax

Self-employment tax covers Social Security and Medicare contributions. Because you are both the employer and the employee, you pay the full 15.3% (12.4% Social Security + 2.9% Medicare). However, only 92.35% of your net self-employment income is subject to this tax, and you can deduct half of it as an above-the-line adjustment on your return.

2026 Thresholds

• Social Security wage base: $184,500 (12.4% applies only up to this amount)
• Medicare: 2.9% on all net SE earnings (no cap)
• Additional Medicare: 0.9% on SE earnings above $200,000

Federal Income Tax

After subtracting the deductible half of your SE tax and your standard deduction from your net SE income, the remaining taxable income is subject to federal income tax using progressive brackets. Your marginal rate increases as your income rises through each bracket, but lower portions of your income are always taxed at the lower rates.

State Income Tax

Most states impose their own income tax on top of federal taxes. Rates vary widely — states like California and Oregon exceed 8%, while Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming have no state income tax on earned wages. This calculator uses simplified effective state rates for a quick estimate.

Quarterly Estimated Payments

The IRS expects freelancers to pay estimated taxes quarterly if they expect to owe $1,000 or more in tax for the year. Failing to make timely payments can result in underpayment penalties. Payments are typically due on April 15, June 15, September 15, and January 15 of the following year.