How much to set aside for taxes on 1099 income in 2026
Who this page is for
This page is for freelancers, side-gig workers, and contractors who receive 1099 income and want the federal set-aside math in plain words. The information-return clock, Form 1099-NEC, is a different page: 1099-NEC deadline January 31. The fourth estimated-tax date is also a different page: January 15 estimated tax payment for 1099 income. How that year becomes four installments, and why the IRS periods are not calendar quarters, is a different page: how much should freelancers set aside for quarterly taxes. This page is the set-aside math.
The federal worksheet is the 2026 Form 1040-ES. That form says estimated tax is the method for income that is not subject to withholding, and it names earnings from self-employment, including gig economy work. The IRS self-employment tax page says self-employment tax and Schedule SE generally apply when net earnings from self-employment, excluding church employee income, were $400 or more, or when church employee income was $108.28 or more. This page does not apply that test.
Self-employment tax: 15.3% of 92.35%
The IRS self-employment tax page says the rate is 15.3%. That rate is 12.4% for Social Security and 2.9% for Medicare. The same split is on the SSA contribution and benefit base page: for 2026, the self-employment Social Security rate is 12.4%, and the self-employment Hospital Insurance rate is 2.9%.
The 15.3% does not land on the full net profit. The 2026 Form 1040-ES self-employment worksheet says to multiply net profit by 92.35% (0.9235) first. That factor is what the form prints. It matches 100% minus half of 15.3% (half of 15.3% is 7.65%, and 100% minus 7.65% is 92.35%). When the Social Security piece is not cut off by the wage base, 15.3% of 92.35% is 14.12955% of net profit.
The Social Security piece does get cut off. The 2026 Form 1040-ES says the maximum earned income subject to the social security tax for 2026 is $184,500. SSA prints the same 2026 contribution and benefit base, $184,500. Worksheet lines 5 through 9 apply the 12.4% only to the part of the 92.35% amount that still fits under $184,500 after wages that already paid Social Security tax. The 2.9% Medicare part still applies to the full 92.35% amount. SSA says there has been no Hospital Insurance wage cap since 1993.
The IRS self-employment page still shows an older wage-base example: for 2024, the first $168,600. This page does not use $168,600 as the 2026 maximum. The 2026 figure used here is the $184,500 in the 2026 Form 1040-ES and on SSA.gov.
Additional Medicare Tax is a further 0.9% when wages, compensation, or self-employment income are over the threshold for the filing status. The IRS self-employment page lists $250,000 for married filing jointly, $125,000 for married filing separate, $200,000 for single, $200,000 for head of household, and $200,000 for qualifying surviving spouse. The 2026 Form 1040-ES points the details to the Instructions for Form 8959. The example below is under the single threshold, so the 0.9% is not in it.
The half deduction, then the income-tax bracket
Half of the self-employment tax is a deduction. It does not cut the self-employment tax itself. Worksheet line 11 multiplies the self-employment tax by 50% (0.50). The form says that amount is the expected deduction on Schedule 1 (Form 1040), line 15, and that it is subtracted when figuring expected AGI. The IRS self-employment page says the same thing in words: the employer-equivalent portion affects income tax, not net earnings and not the self-employment tax.
Income tax is figured on what remains. The 2026 Estimated Tax Worksheet subtracts deductions from expected AGI, then applies the 2026 Tax Rate Schedules. Each row prints a base tax plus a percent of the amount over that row's floor. For a single filer, Schedule X uses these floors: $0 at 10%, $12,400 at 12%, $50,400 at 22%, $105,700 at 24%, $201,775 at 32%, $256,225 at 35%, and $640,600 at 37%. A larger profit can land in a higher row, so the income-tax share of profit is not one flat number.
Filing status changes the rows. Schedule Y-1, for married filing jointly or a qualifying surviving spouse, starts the 12% row at $24,800 instead of $12,400. The same form lists a 2026 standard deduction of $16,100 for single or married filing separately, $32,200 for married filing jointly or a qualifying surviving spouse, and $24,150 for head of household. The form also prints a higher standard deduction for someone who is 65 or older or blind. The example does not add that increase.
A labeled example
Every dollar in this table is either a made-up example profit or the product of a figure printed in the 2026 Form 1040-ES. The $40,000 is not a reader's profit. The example is a single filer, under 65, not blind, not a dependent, with no wages and no other income. The qualified business income line and Schedule 1-A are left blank.
| Step | Example only | Where the figure comes from |
|---|---|---|
| Net profit | $40,000 | Made-up example. Not a household. |
| 92.35% base | $36,940 | $40,000 times 0.9235, the factor the worksheet prints |
| Medicare, 2.9% | $1,071.26 | $36,940 times 0.029 |
| Social Security, 12.4% | $4,580.56 | $36,940 times 0.124. Under $184,500, so none of it is cut off. |
| Self-employment tax | $5,651.82 | The two parts added. That is 15.3% of $36,940. |
| Half deduction | $2,825.91 | 50% of $5,651.82. Worksheet line 11. |
| Example AGI | $37,174.09 | $40,000 minus the half deduction. No other income in the example. |
| Standard deduction | $16,100 | 2026 single amount from the form. No age or blind add-on. |
| Taxable income | $21,074.09 | Example AGI minus $16,100 |
| Income tax | $2,280.89 | Schedule X: $1,240 plus 12% of $8,674.09. The product is $2,280.8908, shown to the nearest cent. |
| Federal total | $7,932.71 | $5,651.82 plus $2,280.89 |
| Share of the example profit | 19.83% | $7,932.71 divided by $40,000, to the nearest hundredth of a percent. The unrounded share is 19.831775%. |
On this example, self-employment tax alone is $5,651.82, which is 14.12955% of the $40,000. Income tax adds $2,280.89 because $21,074.09 of taxable income sits in the 12% layer of Schedule X. The 10% layer is already inside the $1,240 the schedule prints. A profit that pushed taxable income over $50,400 would pick up the 22% layer. This page does not run that second case.
State income tax is not in the federal total. The 2026 Form 1040-ES does not print a state rate. A state percentage, if someone sets one aside, is a separate entry and changes the amount. This page does not name a state rate, and it does not name a state.
The example also leaves out credits, withholding, itemized deductions, the qualified business income deduction, and Additional Medicare Tax. Any of those can change the income-tax line. The free 2026 estimate runs the federal worksheet once, in the browser. Nothing typed there is sent anywhere. The workbook below keeps the year.
The same lines, for the whole year. The Tax Money Kit ($47) is an Excel file. Open it in Excel or Google Sheets. It keeps Schedule C totals, self-employment tax, and a 2026 safe-harbor quarterly payment as the year changes. It does not file a return. It does not name a state rate. It is not the $99/year household board. The example above is one made-up profit. The sheet uses the numbers a person types.
Tax Money Kit ($47)Safe harbor and the quarterly dates
The 19.83% in the example is a share of one made-up profit. It is not the required annual payment. The 2026 Form 1040-ES says estimated tax is generally required when both of these are true.
Higher income changes the prior-year side. If 2025 AGI was more than $150,000 ($75,000 if the 2026 filing status is married filing separately), the form says to substitute 110% for 100%. The required annual payment is the smaller amount, not the smaller percentage. The form's caution says that paying this required amount can still leave tax due when the return is filed. Line 11c is the full 2026 estimated tax. Line 12c is the smaller safe-harbor amount. This page does not choose between them.
Farming and fishing use a different percentage. If at least two-thirds of gross income for 2025 or 2026 is from farming or fishing, the form says to substitute 66 2/3% for 90%, and the 110% rule does not apply. This page does not apply that rule.
The form says the estimated tax can be paid all at once by April 15, 2026, or in four equal amounts on these dates.
| Payment | Date printed in the 2026 Form 1040-ES |
|---|---|
| 1st | April 15, 2026 |
| 2nd | June 15, 2026 |
| 3rd | September 15, 2026 |
| 4th | January 15, 2027 |
January 15, 2027 falls on a Friday. The form prints that date as the fourth payment. The footnote says that payment is not required if the 2026 return is filed by February 1, 2027, and the entire balance is paid with the return. For a fiscal-year filer, the same form says a payment date that falls on a Saturday, Sunday, or legal holiday moves to the next business day, and it points to Publication 509. This page stays on the calendar-year dates in the table. More detail on the worksheet is in Publication 505.
This page does not divide the example into four payments. A quarterly amount needs withholding, any earlier payment, and the choice between the full estimated tax and the safe-harbor amount. Those are blank here. The four periods and a labeled equal split are on how much should freelancers set aside for quarterly taxes.
What this page does not do
This page does not figure a payment for a household. It does not apply the example percentage to a reader's profit. It does not name a state rate. It does not file a return. Confirm the worksheet, the safe harbor, and any state tax with the 2026 Form 1040-ES, Publication 505, and a CPA or enrolled agent.
Workbook for the year. The Tax Money Kit ($47) is an Excel file for Schedule C totals, self-employment tax, and a 2026 safe-harbor quarterly payment. Open it in Excel or Google Sheets. It does not file a return. It does not name a state rate. It is not the $99/year household board. The free 2026 estimate answers once. The sheet tracks the year.
Tax Money Kit ($47) Free 2026 estimateRelated reading
Common questions
What percentage is self-employment tax on 1099 income in 2026?
The IRS self-employment tax page says the rate is 15.3% (12.4% for Social Security and 2.9% for Medicare). The 2026 Form 1040-ES says to multiply net profit by 92.35% (0.9235) before those rates. The Social Security part stops at the 2026 wage base of $184,500, from that form and from the SSA contribution and benefit base page. The IRS self-employment page still shows a 2024 example of $168,600. Federal income tax is separate and depends on the bracket. This page does not figure a payment for a household.
What does the $40,000 example show?
It is a made-up net profit for a single filer with no wages and no other income. Self-employment tax is $5,651.82. After the half deduction and the $16,100 standard deduction, Schedule X income tax is $2,280.89 to the nearest cent. The federal total is $7,932.71, or 19.83% of that example profit. State tax is not included. The example is not a household bill.
When are 2026 estimated tax payments due, and what is the 100% or 110% rule?
The 2026 Form 1040-ES prints April 15, 2026, June 15, 2026, September 15, 2026, and January 15, 2027. The required annual payment is the smaller of 90% of the 2026 tax or 100% of the 2025 tax. If 2025 AGI was more than $150,000 ($75,000 if married filing separately for 2026), the form uses 110% instead of 100%. This page does not apply those percentages to a household. The Tax Money Kit ($47) is an educational workbook on the kit page. The free calculator answers once. Neither one files a return, and neither one is the $99/year household board.
This page does not figure a payment for a household. It does not apply the example percentage to a reader's profit. It does not name a state rate. Confirm the worksheet and the safe harbor with the 2026 Form 1040-ES and a CPA or enrolled agent. Educational only. Not tax, legal, or investment advice. Not a filing service.