“How much tax do I pay on 1099 income?” doesn’t have one answer, because it depends on your profit, your state and whether anyone else in your household has income. But the math is the same for everyone, and once you see it laid out it stops being a mystery. Here’s the whole thing, step by step, using 2026 numbers.
The example tech
Single, no kids, no other job. Lives in Colorado, which has a flat 4.4% state income tax. Works for two cable and fiber companies on a 1099.
- Checks from both companies for the year: $72,000
- Work costs: $12,000 (work miles, meters and hand tools, a ladder, boots, the work share of a phone bill, and equipment chargebacks the companies took out of pay)
- Profit: $60,000
Everything below is figured from that $60,000, not the $72,000. That’s why work costs matter so much: every dollar of real work cost takes a dollar off the number all three taxes are figured on.
Step 1: Self-employment tax
This is Social Security and Medicare. It’s figured on 92.35% of profit (the IRS knocks off 7.65% to match the half an employer would normally pay).
$60,000 × 92.35% = $55,410
$55,410 × 15.3% = $8,478
The 15.3% is 12.4% for Social Security plus 2.9% for Medicare. The Social Security part stops at $184,500 of earnings in 2026; the Medicare part never stops. More on self-employment tax.
Step 2: Take off half of that self-employment tax
You get to take half of the self-employment tax off your income before income tax is figured. It’s the IRS’s way of treating you like an employer for that half.
$8,478 ÷ 2 = $4,239
$60,000 − $4,239 = $55,761 (this is your adjusted gross income)
Step 3: Take off the standard deduction
For 2026 the standard deduction for a single filer is $16,100 (married filing jointly is $32,200). Almost every tech takes the standard deduction instead of itemizing.
$55,761 − $16,100 = $39,661
Step 4: The small-business break
Most people who work for themselves get to take another 20% off. Tax preparers call it the QBI deduction (qualified business income). For a tech it’s figured on profit minus half the self-employment tax, but it can’t be more than 20% of the income left after the standard deduction.
20% × ($60,000 − $4,239) = $11,152
Limit: 20% × $39,661 = $7,932
Break you get: $7,932
$39,661 − $7,932 = $31,729 taxable income
Step 5: Federal income tax
2026 brackets for a single filer: 10% on the first $12,400, then 12% up to $50,400, then 22% up to $105,700.
10% × $12,400 = $1,240
12% × ($31,729 − $12,400) = $2,319
Federal income tax: $3,559
Step 6: State tax
Colorado taxes 4.4% of income after the federal standard deduction. Other states have their own rules, but for a 4–5% state the number lands in the same neighborhood.
4.4% × $39,661 = about $1,745
The total
| Tax | Amount | Share of profit |
|---|---|---|
| Self-employment tax | $8,478 | 14.1% |
| Federal income tax | $3,559 | 5.9% |
| State income tax | $1,745 | 2.9% |
| Total | $13,782 | 23.0% |
As a share of the $72,000 in checks, that’s about 19%.
Notice which tax is biggest. Most techs worry about income tax, but for a typical tech’s profit, self-employment tax is more than double the federal income tax. It doesn’t care about the standard deduction or brackets. It starts on nearly the first dollar of profit.
How the bill changes
| Profit (single, 4.4% state) | Rough total tax | Share of profit |
|---|---|---|
| $30,000 | about $5,700 | 19% |
| $60,000 | about $13,800 | 23% |
| $90,000 | about $22,300 | 25% |
| $120,000 | about $32,700 | 27% |
These are rough figures for one situation. What pushes your number up: a spouse with a good income (your profit stacks on top of theirs), a W-2 job on the side, a higher-tax state. What pulls it down: more real work costs, a no-tax state, kids (the child tax credit comes off the income tax), and putting money in a retirement account such as a SEP IRA.
What to do with this
You don’t need to run this math every check. That’s the point of setting aside a flat share of each check: 33% covers this example with room to spare, and the room is there for the year that doesn’t go like the example. How much to set aside.
Then the money has to actually get to the IRS four times a year. When it’s due and how much.
This is general information about U.S. federal taxes, not advice for your situation. If something here doesn't match your paperwork, ask a tax preparer.