How this estimate works
1
Start with net 1099 income
Your business income is reduced by ordinary deductible costs before the tax estimate is calculated.
2
Apply the standard deduction
The estimate uses the selected filing status to reduce taxable income before income tax is calculated.
3
Add self-employment tax
Independent contractors pay both the employee and employer portions of Social Security and Medicare.
4
Divide by four payments
The annual tax is spread across four equal estimated payments to match standard quarterly deadlines.
Worked example
| Line item | Amount |
|---|---|
| Gross 1099 income | $85,000 |
| Less standard deduction | ($16,100) |
| Estimated income tax | $11,600 |
| Estimated self-employment tax | $12,600 |
| Total annual estimate | $24,200 |