How much to set aside for taxes on 1099 income in 2026

How much should you set aside for taxes on 1099 income?

On 1099 income you owe two federal taxes: self-employment tax (Social Security and Medicare) and income tax. SE tax is close to a flat 14.1% of net profit until you pass the Social Security cap. Income tax starts low and rises with your bracket. Added together, a single filer's total federal tax in 2026 works out to these shares of net profit:

These are federal figures only, for a single filer living in a state with no income tax. They assume the freelance business is the only income, the standard deduction, no credits, and no retirement or health insurance deductions.

How the numbers were computed

Every row follows the same steps, using 2026 federal figures.

1. SE tax. Net earnings are 92.35% of net profit. Social Security is 12.4% of net earnings up to the 2026 wage base of $184,500. Medicare is 2.9% of all net earnings.
2. Adjusted gross income. Net profit minus the deductible half of SE tax.
3. Standard deduction. Subtract $16,100 for a single filer.
4. QBI deduction. 20% of qualified business income (net profit minus the deductible half of SE tax), limited to 20% of taxable income before this deduction. Every example here is below the $201,750 threshold, so no further limits apply.
5. Income tax. Apply the 2026 single brackets: 10% to $12,400, 12% to $50,400, 22% to $105,700, 24% to $201,775, 32% to $256,225, 35% to $640,600, and 37% above.
6. Additional Medicare Tax. 0.9% of net earnings over $200,000 for a single filer. At $200,000 of profit, net earnings are $184,700, so none applies in this table.

At $200,000 of profit, net earnings of $184,700 pass the $184,500 Social Security cap, so SE tax is $22,878.00 of Social Security plus $5,356.30 of Medicare. That is why SE tax stops growing quite as fast at the top of the table. For the full SE tax method, see how to calculate self-employment tax, and for the QBI limit, see the QBI deduction for freelancers.

Turning the table into a habit

Many freelancers move a fixed share of every client payment into a separate savings account the day it arrives. Based on the table, a rough federal-only guide for a single filer looks like this:

• Around $50,000 to $75,000 of profit: about 20% to 21%.
• Around $100,000: about 22% to 23%.
• Around $150,000 to $200,000: about 25% to 27%.

Rounding up a point or two gives you a buffer for a strong year. Any extra simply becomes next year's first payment or a refund. Setting money aside is not the same as paying it, though: you still send quarterly estimated payments to the IRS.

Example: a $75,000 year

Say you expect about $75,000 of profit and choose to keep 21% of every payment. A $4,000 client payment means moving $840 to your tax account. If your profit lands at $75,000, setting aside 21% all year gives you $15,750, slightly more than the $15,494.90 computed above. The small cushion covers a month that runs better than planned.

Because the percentages are based on profit, apply them after your business expenses. If you prefer to set money aside from every payment before expenses, a slightly lower share of revenue covers the same tax.

When to recheck your rate

Your rate is only as good as your income estimate. Revisit it each time you make a quarterly payment, and sooner if you sign a large contract, lose a major client, or start a W-2 job. Moving from $75,000 to $150,000 of profit takes the total share from 20.7% to 25.1%, so a rate set in January can fall short by fall.

State income tax comes on top

The table assumes a state with no income tax. Most states tax freelance income, at rates and with deductions that vary widely, and a few cities add their own tax. State income tax does not change the federal numbers above, so you add it on top. The state pages show how your state changes the picture, and the freelance rate calculator includes state tax when it works out your minimum rate.

What moves your number up or down

• Other income. A W-2 job or a spouse's income on a joint return uses up the lower brackets, so your freelance profit is taxed at higher rates. W-2 Social Security wages also count toward the $184,500 cap.
• Filing status. Married filing jointly has wider brackets and a $32,200 standard deduction, which usually lowers the percentage for the same profit.
• Retirement contributions and health insurance. Contributions to a SEP IRA or solo 401(k) and the self-employed health insurance deduction lower income tax, though not SE tax. See SEP IRA vs solo 401(k).
• Higher incomes. Above $201,750 of taxable income for a single filer, QBI limits begin to apply, and net earnings above $200,000 trigger the 0.9% Additional Medicare Tax.
• Credits. Credits such as the child tax credit reduce income tax directly and can lower the share considerably.

Run your own numbers

Your situation will not match a table exactly. The quarterly estimated tax calculator estimates your 2026 federal tax from your expected profit, and the self-employment tax calculator isolates the SE tax piece. If you have several income sources, large deductions, or income near the QBI thresholds, a tax professional can give you a more precise set-aside rate.