Complete reference for freelancers, 1099 contractors, and small business owners. All rates reflect IRS guidance for the 2026 tax year.
Self-employment tax (SE tax) covers your Social Security and Medicare contributions. Unlike W-2 employees who split these taxes with their employer, self-employed individuals pay both the employee and employer shares — but you do get a deduction for half of it.
| Tax Component | Rate | Income Subject To Tax | Notes |
|---|---|---|---|
| Social Security | 12.4% | Up to $184,500 | Combined employee + employer share |
| Medicare | 2.9% | All net SE income | No wage base cap |
| Additional Medicare | 0.9% | Above $200,000 (single) / $250,000 (MFJ) | No employer match; withheld from salary only |
| Total SE Tax (below wage base) | 15.3% | Up to $184,500 in net SE income | 12.4% SS + 2.9% Medicare |
| SE Tax Deduction | 50% | Of total SE tax paid | Deducted on Schedule 1 (reduces AGI) |
Federal income tax brackets are marginal — you only pay the higher rate on income within that bracket, not on all your income. These brackets apply to taxable income after deductions.
| Taxable Income | Tax Rate | Tax Owed on Bracket |
|---|---|---|
| $0 – $12,100 | 10% | 10% of taxable income |
| $12,100 – $49,150 | 12% | $1,210 + 12% over $12,100 |
| $49,150 – $105,225 | 22% | $5,656 + 22% over $49,150 |
| $105,225 – $200,700 | 24% | $17,994 + 24% over $105,225 |
| $200,700 – $375,000 | 32% | $40,908 + 32% over $200,700 |
| $375,000 – $530,000 | 35% | $96,684 + 35% over $375,000 |
| Over $530,000 | 37% | $150,934 + 37% over $530,000 |
| Taxable Income | Tax Rate | Tax Owed on Bracket |
|---|---|---|
| $0 – $24,200 | 10% | 10% of taxable income |
| $24,200 – $98,300 | 12% | $2,420 + 12% over $24,200 |
| $98,300 – $210,450 | 22% | $11,312 + 22% over $98,300 |
| $210,450 – $401,400 | 24% | $35,985 + 24% over $210,450 |
| $401,400 – $750,000 | 32% | $81,813 + 32% over $401,400 |
| $750,000 – $1,060,000 | 35% | $193,365 + 35% over $750,000 |
| Over $1,060,000 | 37% | $301,865 + 37% over $1,060,000 |
| Taxable Income | Tax Rate | Tax Owed on Bracket |
|---|---|---|
| $0 – $17,300 | 10% | 10% of taxable income |
| $17,300 – $64,850 | 12% | $1,730 + 12% over $17,300 |
| $64,850 – $105,225 | 22% | $7,436 + 22% over $64,850 |
| $105,225 – $200,700 | 24% | $16,318 + 24% over $105,225 |
| $200,700 – $375,000 | 32% | $39,232 + 32% over $200,700 |
| $375,000 – $530,000 | 35% | $95,008 + 35% over $375,000 |
| Over $530,000 | 37% | $149,258 + 37% over $530,000 |
The standard deduction reduces your taxable income before applying the brackets above. Most taxpayers take the standard deduction rather than itemizing, unless their itemized deductions (mortgage interest, state taxes, charitable contributions, etc.) exceed these amounts.
These deductions can significantly reduce your taxable income. Unlike employees who take a standard deduction, the self-employed have access to several above-the-line deductions that reduce adjusted gross income directly.
Deduct 50% of your total self-employment tax on Schedule 1. This reduces your AGI, which in turn reduces your income tax. You don't need to itemize to claim this — it's an above-the-line deduction.
Simplified method: $5/sq ft, up to 300 sq ft = max $1,500/year. The space must be used regularly and exclusively for business.
Standard mileage rate: $0.70/mile for 2026. Keep a mileage log with date, destination, business purpose, and miles driven for each trip.
Deduct 100% of premiums paid for yourself, your spouse, and dependents — as long as you're not eligible for employer-sponsored coverage. Taken above-the-line on Schedule 1.
Contribute up to $70,000 for 2026 (or 25% of net SE income, whichever is less). Easy to open and administer — contributions are tax-deductible.
Total contributions up to $70,000 for 2026. Employee deferrals up to $23,500 (+ $7,500 catch-up if 50+), plus employer contributions of up to 25% of net SE income.
Understanding how Social Security and Medicare taxes work is critical for accurate tax planning as a freelancer or independent contractor.
| Item | 2026 Amount / Rate | Notes |
|---|---|---|
| Social Security Wage Base | $184,500 | SS tax only applies to income up to this cap |
| Social Security Rate (SE) | 12.4% | Covers both employee (6.2%) and employer (6.2%) shares |
| Medicare Rate (SE) | 2.9% | Covers both employee (1.45%) and employer (1.45%) shares |
| Additional Medicare Tax | 0.9% | Applies above $200K single / $250K MFJ — no employer match |
| SE Tax Applies To | 92.35% | Net profit × 92.35% = SE income subject to tax |
| Deductible Portion | 50% | Of total SE tax owed is deductible on Schedule 1 |
If you expect to owe $1,000 or more in taxes after withholding and credits, the IRS requires you to make quarterly estimated payments. Missing deadlines results in underpayment penalties.
| Quarter | Income Period | Due Date | Form to Use |
|---|---|---|---|
| Q1 2026 | January 1 – March 31 | April 15, 2026 | Form 1040-ES |
| Q2 2026 | April 1 – May 31 | June 16, 2026 | Form 1040-ES |
| Q3 2026 | June 1 – August 31 | September 15, 2026 | Form 1040-ES |
| Q4 2026 | September 1 – December 31 | January 15, 2027 | Form 1040-ES |