1099 Tax Calculator
(Self Employed)

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 their tax burden to their state and federal government, just like a small business would.

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 undertook a designing gig as a side hustle and got paid. The 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 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 accordingly, 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 to figure out your SE tax using Schedule SE (Form 1040 or 1040-SR) or you can simply use the self employed tax calculator.

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

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.

However, 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 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.