1099 Tax Calculator &
Deduction Estimator

According to the IRS, any self-employed individual who works as an independent contractor or a freelancer is considered a 1099 employee.

A 1099 form is entirely different from a W-2 form. If your employer or client sends you a self employed 1099 form, it’s a sign that they see you as an independent contractor rather than an employee.

W2-employees have taxes withheld when they get paid. However, freelancers or 1099 self employed individuals have to figure out what they owe in taxes to their state and federal government, just like a small business would.

If you work for a company that issues you a paycheck for wages or salary on a regular basis, you won't be receiving a 1099 from your employer, and your employer withholds some of your pay for taxes. But if you work for yourself, and the company or companies that pay you for your work send you 1099 forms, you'll need to figure out what you owe and pay your own taxes.

Small businesses hire accountants, bookkeepers and CPAs to handle their accounts and taxes. That’s what the IRS expects from you if you have any self-employed income.

A 1099 form documents any income you received, and that income must also be included on your tax return.

For example, if you took on a design gig as a side hustle, making menus for a new restaurant and got paid, your client will send you Form 1099-NEC reporting that amount. So, you need to ensure that you’ve included the income on your tax return for the year, as you’ll need to pay income taxes on it.

The form is an important document to help you file your income tax return. So if you receive it, you must check it for accuracy. Verify if the following information has been correctly added to the form:

• Your correct personal information
• The amount of income reporting

If anything seems inaccurate, you must contact your client as soon as possible and get your information corrected. If you have a landscaping company, and you did some work on the grounds of a business's headquarters, the company would send you a 1099. If the amount they paid you is listed on the form as more than they actually paid you, according to your bank records, this is a problem. This form also gets sent to the IRS to report your income, and if the IRS sees that you were paid more than you actually were, it will be expecting you to pay more in taxes than you actually owe. That's why you need to contact the company to issue you and the IRS a new, accurate 1099 form as soon as possible.

If your information seems accurate, keep a copy of your Form 1099 to file your income tax return. Based on the type of form you receive, the income will be reported on your tax return in different places and you will receive your income tax refund. For example, income on a 1099-NEC will be reported on your Schedule C, Profit or Loss from the business. Income on a 1099-INT will be reported on the first page of your tax return, Form 1040.

FlyFin’s self employed income tax calculator makes calculating your self-employment income tax liability easy.

Self employment tax consists of Social Security and Medicare taxes primarily for individuals who work for themselves. It is similar to the Social Security and Medicare taxes withheld from the pay of most wage earners. The IRS offers you Schedule SE (Form 1040 or 1040-SR) to figure out your SE tax, or you can simply use the self employed tax calculator.

If you are an independent contractor, you are 1099 self-employed. This means that your earnings are subject to the Self Employment Tax. The good news is that as a self-employed worker, you can lower your taxes by claiming tax deductions.

FlyFin's A.I. finds every possible tax deduction in your expenses on an ongoing basis, so you're ready as soon as taxes are due.

As a freelancer, you must make quarterly tax payments, especially if you owe $1,000 or more in taxes when you file your annual return. It’s the same case with corporations that expect to owe at least $500 to the government.

One way to know what you owe is to look at last year's tax return. Did you end up paying more than $1,000 in income tax working as a driver for Postmates last year, for example? Then you'll need to quarterly taxes this year.

Under certain circumstances, you may not have to pay estimated taxes if you meet the following conditions:

• You had no tax liability during the previous year
• Your last tax return covered a whole year (12 months)
• You were a U.S. citizen for the entire year

As a freelancer, you need to calculate your quarterly taxes using the IRS’ Estimated Tax Worksheet found within Form 1040-ES (for self-employed individuals and freelancers). You can also use FlyFin’s Quarterly Tax Calculator.

Moreover, failure to pay quarterly taxes can result in a penalty. So, check out the Tax Penalty Calculator to avoid any estimated tax penalties.

So, to sum it up, as a 1099 contractor, you’re typically responsible for quarterly and annual taxes.

1099 tax savings

We’re all looking for ways to save on taxings, and one way to do this is by taking advantage of tax credits. Tax credits are a dollar-for-dollar reduction on your income taxes. If you have children, for example, the government provides credits to help support your family. The dependent care credit helps offset the cost of childcare. Or, if you pay higher education expenses, like for a college or university, you might qualify for the education tax credit.

You might qualify for the electric vehicle tax credit if you purchased an electric car this year.

There’s even a tax credit available for low-to-moderate-income workers to help reduce the taxes owed called the earned income credit. If you meet the criteria set by the IRS, you can help lower your tax bill and score tax savings.