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Q: What is self-employment tax for 2026?

Self-employment tax in 2026 is 15.3% of net self-employment income — 12.4% Social Security tax (on income up to $184,500) plus 2.9% Medicare tax (on all income). If net SE income exceeds $200,000 ($250,000 married filing jointly), an additional 0.9% Additional Medicare Tax applies. You can deduct half of SE tax from gross income. Source: IRS Schedule SE, IRC § 1401.

Q: How much should I pay in quarterly estimated taxes?

Quarterly estimated taxes must cover at least 90% of current-year tax liability or 100% of prior-year tax (110% if prior-year AGI exceeded $150,000) — whichever is less. As a self-employed person, set aside 25–30% of net income to cover both SE tax and federal income tax. 2026 due dates: April 15, June 16, September 15, January 15, 2027. Use TaxStackHub's Estimated Tax Generator for exact calculations. Source: IRS Publication 505.

Q: When should a sole proprietor elect S-Corp status?

S-Corp election typically makes financial sense when net self-employment income exceeds $50,000–$80,000 per year. At $150,000 net income, an S-Corp saves approximately $8,687 annually in SE tax compared to a sole proprietorship (California, 2026). The S-Corp pays the owner a reasonable W-2 salary subject to payroll taxes, with remaining profit taken as distributions not subject to SE tax. Factor in payroll service costs ($500–$1,500/yr) and state fees. Source: IRC § 1361–1379, IRS Rev. Rul. 74-44.

Q: Can I deduct my home office as a self-employed person?

Yes. Self-employed individuals can deduct home office expenses if the space is used regularly and exclusively for business as the principal place of business. Two methods: (1) Simplified — $5 per square foot, up to 300 sq ft ($1,500 max deduction). (2) Regular — actual expenses (mortgage interest/rent, utilities, insurance) multiplied by the percentage of home used for business. The regular method typically yields larger deductions. Source: IRS Publication 587, IRC § 280A.

Q: What is the standard deduction for 2026?

The 2026 standard deduction is $15,000 for single filers and $30,000 for married filing jointly (per IRS Rev. Proc. 2025-61). Most taxpayers benefit from taking the standard deduction unless itemized deductions (mortgage interest, state taxes up to $10,000 SALT cap, charitable contributions, medical expenses over 7.5% AGI threshold) exceed these amounts. Source: IRS Rev. Proc. 2025-61, IRC § 63.

Q: What is the Section 199A QBI deduction?

The Section 199A Qualified Business Income (QBI) deduction allows eligible pass-through business owners (sole proprietors, S-Corp shareholders, partners) to deduct up to 23% of qualified business income (raised from 20% under OBBBA). For 2026, the deduction phases out for specified service trades at taxable income between $197,300–$247,300 (single) and $394,600–$494,600 (MFJ). W-2 wage and property limitations apply above the phase-in thresholds. Source: IRC § 199A, IRS Form 8995, OBBBA.

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