SE tax, federal income tax, QBI deduction, and quarterly payment schedule — for independent contractors and 1099 workers. 2026 OBBBA rates.
| Gross 1099 Income | — |
| Business Expenses | — |
| Net Profit (Schedule C) | — |
| SE Tax Deduction (50% of SE tax) | — |
| QBI Deduction (23% of net profit) | — |
| Standard Deduction | — |
| Federal Taxable Income | — |
| Federal Income Tax | — |
| Self-Employment Tax | — |
| State Income Tax (est.) | — |
| Total Tax Burden | — |
| Quarter | Period | Due Date | Payment |
|---|---|---|---|
| Q1 | Jan 1 – Mar 31 | April 15, 2026 | — |
| Q2 | Apr 1 – May 31 | June 16, 2026 | — |
| Q3 | Jun 1 – Aug 31 | September 15, 2026 | — |
| Q4 | Sep 1 – Dec 31 | January 15, 2027 | — |
Federal only. Use IRS Direct Pay or EFTPS to submit. Safe harbor: pay 100% of prior year tax (110% if 2025 AGI > $150,000) to avoid underpayment penalty.
Federal calculation only. State tax shown is an estimate based on approximate effective rate. QBI deduction uses simplified 23% rate (OBBBA) — SSTB phase-outs not applied above phase-out thresholds. AMT not modeled. For tax advice, consult a CPA or enrolled agent. Source: IRC §§ 1401, 199A; IRS Publications 505, 533.
As a 1099 independent contractor, you are responsible for both the employee and employer portions of Social Security and Medicare taxes — combined into the self-employment (SE) tax. Add federal income tax, and a typical freelancer making $100,000 gross with $15,000 in expenses pays approximately $21,000–$24,000 in total federal tax.
1. Self-Employment Tax (15.3%): Calculated on 92.35% of your net profit (Schedule C income minus expenses). The 12.4% Social Security portion is capped at the $184,500 wage base in 2026. The 2.9% Medicare portion has no cap. You can deduct 50% of SE tax from your gross income on Schedule 1.
2. Federal Income Tax: Applied to your taxable income after deductions. The 2026 brackets for single filers range from 10% (up to $11,925) to 37% (above $626,350). Most freelancers earning $50K–$150K net pay 22%–24% on their marginal income.
3. QBI Deduction (23% — OBBBA Rate): The Qualified Business Income deduction, made permanent and increased to 23% by the One Big Beautiful Bill Act (OBBBA), reduces taxable income by 23% of your net business income. A new $400 minimum floor means even low-income freelancers get at least $400 off their taxable income. This is one of the most valuable deductions available to self-employed workers.
Under the OBBBA, the 1099-NEC reporting threshold rose from $600 to $2,000 effective for payments made in 2026. Businesses only need to issue a 1099-NEC when they pay a contractor $2,000 or more during the year. This does NOT change your tax obligation. You owe SE tax on all net self-employment income above $400, regardless of whether you receive a 1099. The threshold only affects whether the payer is required to file the information return.
| Net Profit | SE Tax | QBI Deduction | Income Tax (Single) | Total Federal Tax | Effective Rate |
|---|---|---|---|---|---|
| $40,000 | $5,652 | -$9,200 | $1,935 | $7,587 | 19.0% |
| $60,000 | $8,478 | -$13,800 | $3,805 | $12,283 | 20.5% |
| $80,000 | $11,304 | -$18,400 | $6,320 | $17,624 | 22.0% |
| $100,000 | $14,130 | -$23,000 | $9,060 | $23,190 | 23.2% |
| $150,000 | $21,195 | -$34,500 | $18,120 | $39,315 | 26.2% |
| $200,000 | $26,482 | -$46,000 | $32,300 | $58,782 | 29.4% |
Single filer, standard deduction applied, QBI at 23% OBBBA rate, no state tax included. Approximate values.
The S-Corp break-even for most freelancers is $60,000–$80,000 in net self-employment income. Above $80,000, S-Corp election almost always makes financial sense. Here is the math at $150,000 net profit:
The S-Corp election also preserves the QBI deduction on the distribution portion, though the W-2 salary loses QBI treatment. Net QBI impact is modestly negative at most income levels. Use the S-Corp Election Calculator for a precise break-even at your income.