Keelsheet
How much should I set aside from each 1099 payment?
Free 1099 set-aside calculator. A 1099 is the tax form clients send freelancers to report what they paid them. Enter your expected year and get the share of each client payment to move into a tax account.
Set aside from each client payment
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Share of net profit
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Planning estimate, not tax advice. 2026 IRS figures; 2027 figures are not published yet. Confirm with IRS Form 1040-ES or a tax professional.
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The Keelsheet Tax Bundle (paid spreadsheets) tracks income and expenses all year and gives each quarterly tax payment (IRS Form 1040-ES). Excel + Google Sheets, one-time purchase.
Buy the Tax Bundle · $22How the estimate works
- Self-employment tax: 15.3% of 92.35% of profit. The 12.4% Social Security part stops at the 2026 wage base of $184,500, minus your own W-2 box 3 Social Security wages (not your spouse's); the 2.9% Medicare part has no cap. The 2027 wage base will be $192,300.
- Additional Medicare Tax: 0.9% on self-employment earnings above $200,000 (single) or $250,000 (joint), reduced by W-2 box 5 Medicare wages (both spouses' combined on a joint return).
- Federal income tax: profit minus half of SE tax, minus the 2026 standard deduction ($16,100 single, $32,200 joint) and the QBI deduction, taxed at 2026 brackets. Only the tax your profit adds on top of your W-2 box 1 taxable wages counts. Box 1 is lower than boxes 3 and 5 when you make pre-tax 401(k) deferrals, because those deferrals are still subject to Social Security and Medicare (IRS).
- State: your rate × profit.
- Per client payment = total ÷ client payments. Of profit = total ÷ (payments − expenses).
Sources: IRS Rev. Proc. 2025-32, IRS self-employment tax, SSA wage base. Not included: itemized deductions, credits, capital gains, local taxes. Read more: how much to set aside for 1099 taxes, self-employment tax, quarterly estimated taxes, or try the quarterly payment calculator.
FAQ
How much should I set aside from each 1099 payment?
Enough to cover self-employment tax plus the extra federal and state income tax your profit adds. Tax is owed on profit, but clients pay you gross, so the share of each payment is lower than the share of profit when you have expenses. Enter your numbers above for both.
Why is my rate higher than my tax bracket?
Self-employment tax (15.3% on 92.35% of profit, up to the Social Security wage base) comes on top of income tax.
Does this include my W-2 job?
It assumes withholding already covers the tax on W-2 wages. Your own Social Security wages (W-2 box 3) use up your Social Security wage base; your taxable wages (box 1) set your bracket. On a joint return, both spouses' wages push your profit into a higher bracket and count toward the Additional Medicare Tax threshold, but your spouse's wages do not reduce your Social Security wage base.
Which figures does it use?
Tax year 2026 IRS figures: standard deduction, brackets, the $184,500 Social Security wage base and the QBI deduction. The 2027 wage base is $192,300; other 2027 figures are not published yet.
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