Estimate SE tax, income tax and quarterly payments on your 1099 or freelance income.
Simplified estimate: applies the 15.3% SE rate on 92.35% of net profit, halves SE tax as a deduction, and uses the standard deduction. Excludes state tax and QBI deduction. Estimates only — not tax advice.
Why the self-employed pay more
Employees split FICA with their employer; the self-employed pay both halves — 15.3% on 92.35% of net profit. The good news: you can deduct the employer-equivalent half, and half of SE tax comes off your adjusted gross income.
Paying quarterly
The IRS expects estimated taxes four times a year (April, June, September, January). A safe rule is to set aside 25–30% of every payment you receive the moment it arrives — future you will be grateful in April.
Deductions that shrink the bill
Home office (square-footage method), mileage, software subscriptions, health insurance premiums, half of your SE tax and the 20% QBI deduction on pass-through income all reduce what you owe. Track expenses from day one — every $1,000 of legitimate deduction saves roughly $300–450 at combined federal and SE rates.
Does an LLC change my taxes?
By default, no — a single-member LLC files like a sole proprietor and owes the same SE tax. Electing S-corporation status can cut SE tax by splitting income into salary (taxed normally) and distributions (skipping SE tax), but adds payroll costs and paperwork. It usually pays off only above roughly $60–80k of net profit.
Frequently asked questions
How much should a 1099 worker set aside for taxes?
Commonly 25–30% of net income for federal tax plus SE tax, more in high-tax states.
What is the SE tax rate?
15.3% total: 12.4% Social Security up to the wage base plus 2.9% Medicare on all net earnings.
Do I owe SE tax on a side gig only?
Yes — SE tax applies to net self-employment earnings once they exceed $400 for the year, even if you have a full-time job.
When are quarterly estimated taxes due?
April 15, June 15, September 15 and January 15 of the following year, for income earned in the preceding quarter.
What is the QBI deduction?
Up to 20% of qualified pass-through business income deducted below the line — worth roughly 3–4% off your effective rate for many freelancers.
Do I pay both income tax and SE tax?
Yes — SE tax funds Social Security/Medicare and is separate from federal income tax, which is why effective rates look steep on 1099 income.