If you freelance in the United States and get paid on a 1099, no employer takes tax out of your pay. You have to work it out yourself, set money aside, and pay it during the year.
In 2026, a freelancer owes two federal taxes on the same profit: self-employment tax and federal income tax. Self-employment tax is 15.3% on 92.35% of your net profit. On top of that, you pay federal income tax after deductions, including the 2026 standard deduction of $16,100 for a single filer. You usually pay both taxes in four quarterly payments.
For example, a single freelancer with $60,000 in gross income and $5,000 in expenses owes $11,724.97 in total federal tax for 2026 and keeps $43,275.03. The worked example below shows how that number is reached.
What Is 1099 Income?
A 1099 is a form a client sends to report what it paid you. The most common form for freelance work is the 1099-NEC, for pay for nonemployee compensation.
A 1099 is not a tax bill. It is a record. You report all freelance income on your tax return, whether or not you receive a 1099.
Most freelancers report income and expenses on Schedule C. Net profit — gross income minus business expenses — is what is taxed.
For payments made in 2026, a business generally has to file a 1099-NEC only when it paid a payee $2,000 or more during the year. That is a reporting rule for the payer, not a tax-free limit for you.
The Two Taxes Freelancers Pay
Self-Employment Tax: 15.3%
Self-employment tax pays for Social Security and Medicare: 12.4% for Social Security and 2.9% for Medicare.
The Social Security part is capped. For 2026, the wage base is $184,500, according to the Social Security Administration. You pay the 12.4% part only up to that amount. The 2.9% Medicare part has no cap. You can deduct one-half of your self-employment tax when you work out your income tax, without itemising.
You do not pay it on your full net profit. Schedule SE first multiplies your net profit by 92.35%, then applies the 15.3% rate to that smaller amount.
Federal Income Tax
Federal income tax is separate. You pay it on taxable income: net profit minus deductions. For 2026, the standard deduction is $16,100 for a single filer, $32,200 for married couples filing jointly, and $24,150 for heads of household, under IRS Revenue Procedure 2025-32.
Federal income tax uses marginal brackets. For a single filer in 2026, the first $12,400 of taxable income is taxed at 10%, and the next slice, up to $50,400, at 12%. State income tax, if any, is separate.
Worked Example: $60,000 Gross Income in 2026
This example uses a single filer who takes the standard deduction and has no other income, credits, or W-2 wages. It covers federal tax only.
- Gross income: $60,000
- Business expenses: $5,000
- Net profit: $60,000 − $5,000 = $55,000
Step 1: Self-employment tax
- Net earnings: $55,000 × 92.35% = $50,792.50
- Self-employment tax: $50,792.50 × 15.3% = $7,771.25
Step 2: Federal income tax
- One-half of self-employment tax, deductible: $7,771.25 ÷ 2 = $3,885.63
- Adjusted gross income: $55,000 − $3,885.63 = $51,114.37
- Taxable income: $51,114.37 − $16,100 standard deduction = $35,014.37
- Income tax: 10% on the first $12,400 = $1,240.00, plus 12% on the remaining $22,614.37 = $2,713.72
- Federal income tax: $3,953.72
Step 3: Total tax and take-home pay
- Total federal tax: $7,771.25 + $3,953.72 = $11,724.97
- Take-home pay: $55,000 − $11,724.97 = $43,275.03
That is about 21.3% of the $55,000 net profit. Self-employment tax alone is $7,771.25, more than the federal income tax of $3,953.72.
Quarterly Estimated Tax Payments for 2026
The IRS expects you to pay tax as you earn income, not all at once in April. Freelancers usually pay in four instalments.
The periods are not even calendar quarters: the second period covers only April and May. You generally pay a quarter of your estimated annual tax each time.
What Lowers Your 1099 Tax Bill?
Only net profit is taxed, so every ordinary and necessary business expense matters — software, a home office, mileage, health insurance, and retirement savings.
Besides the standard deduction, you can deduct one-half of your self-employment tax, as shown above.
Try the Calculator
Try the calculator: Want your own number, not just an example? Enter your gross income, expenses, filing status, and state in the 1099 Tax Calculator and it will estimate your self-employment tax, federal income tax, total tax, and take-home pay for 2026.
Frequently Asked Questions
How much tax do I pay on 1099 income in 2026?
It depends on your net profit, filing status, and deductions. In the example above, a single filer with $60,000 in gross income and $5,000 in expenses owes $11,724.97 in total federal tax.
Do I owe tax if I did not get a 1099?
Yes. You owe tax on all freelance income, whether or not a client sent you a 1099. The $2,000 threshold is a reporting rule for the payer, not a tax-free limit for you.
What is the self-employment tax rate for 2026?
It is 15.3%: 12.4% for Social Security and 2.9% for Medicare, on 92.35% of your net profit. The Social Security part is capped at the $184,500 wage base.
When are 2026 quarterly taxes due?
April 15, 2026, June 15, 2026, September 15, 2026, and January 15, 2027. Those dates cover the 2026 tax year.
Can I deduct business expenses from 1099 income?
Yes. You report gross income and subtract ordinary and necessary business expenses on Schedule C. Only net profit is taxed.
Do I still pay self-employment tax if I also have a W-2 job?
Yes, on your freelance profit. Your W-2 wages count toward the $184,500 wage base first.
Disclaimer: This article is general information only. It is not financial or tax advice. Check the current IRS rules before you decide.