Commission-Only 1099 Tax True-Up Calculator
1099 commission earners owe self-employment tax (15.3%) PLUS federal and state income tax — typically 35-50% total. Without withholding, quarterly estimated payments are required. Calculate your true-up amount.
Self-Employment Tax Adds 15.3%
SE tax is Social Security (12.4% up to $176,100 in 2026) + Medicare (2.9% no cap). Half is deductible against AGI, making the effective rate ~14.13% on net business income up to the SS cap, then 1.45% above. Total tax burden for high-income 1099 earners often hits 45-55%.
Quarterly Estimated Payments
Pay by April 15, June 15, September 15, and January 15 to avoid underpayment penalties. Safe harbor: pay either (1) 100% of prior year's tax (110% if AGI > $150K) or (2) 90% of current year's tax. Underpayment penalty is currently ~7% annualized — significant but not catastrophic.
Tax-Saving Strategies
(1) Solo 401(k) — contribute up to $70,000 in 2026 ($77,500 if 50+, $81,250 if 60-63). (2) SEP-IRA — up to 20% of net SE income, max $70K. (3) Maximize business expense deductions — home office, equipment, software, professional development. (4) S-Corp election once net income exceeds $80K-$100K to reduce SE tax on distributions.
Source: IRS Schedule SE, Form 1040-ES instructions, IRC Section 1401 SE Tax. Last updated: May 2026.