Texas 1099 Tax Calculator (2026)
Built for Texas freelancers, contractors, consultants, and gig workers. We compute self-employment tax (15.3% on 92.35% of net), apply the deductible-half adjustment, and run federal income tax on top — exactly as a Schedule SE + 1040 flow does. Texas, again, adds nothing on the income side.
Self-employed Texans pay both halves of FICA (15.3% combined) on 92.35% of net earnings. Half is deductible above-the-line. Set aside ~25–30% for taxes if you have no other withholding.
Why 1099 income is taxed harder than W-2 income
On a W-2 paycheck your employer pays half of FICA (7.65%) and you pay the other half (7.65%). As a 1099 contractor, you’re both employer and employee, so you owe the full 15.3% — that’s self-employment tax. The IRS softens the blow two ways: only 92.35% of net SE earnings are subject to SE tax, and you can deduct the employer half above-the-line on your 1040.
On top of SE tax, regular federal income tax applies to your net earnings (after the deductible-half adjustment, the standard deduction, and any QBI deduction you’re entitled to). The QBI deduction can shave 20% off qualifying pass-through income for many freelancers earning below the QBI thresholds (~$197k single / $394k joint in 2026).
What “net SE income” means in this calculator
Enter your gross 1099 income minus ordinary business expenses (home office, software, mileage, equipment, professional services, health insurance premiums for SE folks, etc.). If you’re on Schedule C, this is your line 31 number. We don’t try to estimate your expenses — only you know what’s legitimate.
Set-aside rules of thumb for Texas freelancers
- Up to ~$60k net: set aside ~22-25%.
- $60k–$150k net: set aside ~25-30%.
- $150k–$300k net: set aside ~30-33%.
- $300k+ net: set aside 33-37% and consider quarterly payments.
Sweep the set-aside into a separate high-yield savings account the day each client invoice clears. The discipline of seeing a “tax” bucket grow makes April painless.
Texas-specific 1099 considerations
- No state income tax. You file federal only on the income side. No state-equivalent of California’s 1099-MISC filings.
- Franchise tax. If you operate as an LLC or corporation, you may need to file a Texas franchise tax report annually (often a “no tax due” report under the threshold).
- Sales tax. Most freelance services aren’t taxable, but data processing, info services, and certain technical work are. Check Texas Tax Code §151.0101.
Frequently asked questions
How much should a Texas 1099 contractor set aside for taxes?
A common rule is 25–30% of net earnings (gross minus business expenses). That covers self-employment tax (~14% effective on most income after the deduction), federal income tax, and a buffer. High earners ($200k+) should set aside 30-35% to cover the 0.9% additional Medicare tax and higher federal brackets.
What's the difference between SE tax and income tax?
Self-employment tax is the 1099 equivalent of FICA — 15.3% (12.4% Social Security + 2.9% Medicare) on 92.35% of your net SE income. Federal income tax is the regular bracket-based tax everyone pays. As a 1099 contractor you owe both, which is why your tax bill is materially higher than a W-2 worker on the same gross.
Can I deduct half of my self-employment tax?
Yes — you can deduct the 'employer-equivalent' half of SE tax (7.65% of the SE-taxable amount) above-the-line on your federal return. The calculator does this automatically. It's why effective rates for 1099 income aren't quite as brutal as the headline 15.3% + bracket math suggests.
Do I need to make quarterly estimated payments?
Generally yes. If you expect to owe $1,000+ in federal tax for the year and don't have W-2 withholding covering at least 90% of current-year tax (or 100% of last year's, 110% if AGI > $150k), you owe estimated payments. Due dates: April 15, June 15, September 15, and January 15 of the following year.
Is an LLC or S-corp worth it for Texas freelancers?
An LLC alone is mostly a liability shield — it doesn't change federal tax. Electing S-corp tax treatment can save SE tax once your net income is comfortably above ~$80k–$100k, by paying yourself a 'reasonable salary' (subject to FICA) and taking the rest as distributions (not subject to SE tax). Texas franchise tax kicks in for entities over the no-tax revenue threshold (~$2.47M for 2024). Talk to a Texas CPA before electing.
Does Texas tax 1099 income?
No — Texas has no state income tax on individual self-employment income. There is a state franchise tax on most businesses, but it has a high no-tax revenue threshold and only applies to qualifying entities. Most sole proprietors and small LLCs owe nothing to Texas.