Sources (checked 28 September 2026)
- Schedule SE + Pub 334: SE tax stack and 92.35% net-earnings adjustment. About Schedule SE
- IRS Rev. Proc. 2025-32: 2026 federal brackets and standard deductions ($16,100 single / $32,200 MFJ / $16,100 MFS / $24,150 HoH). IRS newsroom (Rev. Proc. 2025-32)
- Form 8995 instructions: QBI deduction = lesser of 20% of QBI or 20% of taxable income before the QBI deduction. irs.gov/instructions/i8995
- SSA COLA / CBB: 2026 Social Security wage base $184,500. ssa.gov/oact/cola/cbb.html
- Form 7206 instructions, Pub. 560, Form 8959 instructions: self-employed health insurance and SEP or Solo 401(k) contributions reduce AGI, not SE tax; W-2 wages and SE income are combined for the 0.9% Additional Medicare threshold. i7206; Pub 560; i8959
- State revenue department rate tables: flat top-marginal rates for 50 states + DC stored in production
STATE_TAX_RATES.
Calculation steps (production)
Supported filing statuses: single, married filing jointly, married filing separately, and head of household. Optional inputs include W-2 income, withholding, quarterly payments already made, QBI toggle, health insurance, retirement contributions, and business miles at the IRS standard mileage rate stored in constants ($0.725 for the current engine).
- Net SE income (Schedule C net profit) = gross 1099 income − business expenses − mileage deduction (floored at zero). Self-employed health insurance and SEP or Solo 401(k) contributions are not subtracted here. They reduce AGI in step 4 and do not change SE tax.
- Taxable SE earnings = net SE income × 0.9235.
- SE tax = Social Security (12.4% × the lesser of taxable SE earnings or the $184,500 wage base minus any W-2 wages entered) + Medicare (taxable SE earnings × 2.9%) + Additional Medicare (0.9% × max(0, min(taxable SE earnings, taxable SE earnings + W-2 wages − filing-status threshold))). The W-2 field is treated as this filer's own wages. A spouse's wages are not included.
- AGI = net SE income − half of Schedule SE tax (Social Security + Medicare; the 0.9% Additional Medicare is not part of the deductible half) − self-employed health insurance − SEP or Solo 401(k) contributions + W-2 income. Health insurance and retirement amounts are used as entered; the Form 7206 and SEP limits are not checked. The QBI deduction is not an AGI reduction.
- Taxable income before QBI = max(0, AGI − standard deduction for the filing status).
- QBI deduction (when enabled) = min(20% of qualified business income, 20% of taxable income before QBI). Qualified business income is net SE income minus the deductible half of SE tax, self-employed health insurance, and SEP or Solo 401(k) contributions, floored at zero. SSTB and Form 8995-A limitations are not modelled.
- Federal taxable income = taxable income before QBI − QBI deduction. Federal income tax uses the 2026 brackets for single, married filing jointly, and head of household. Married filing separately uses its own 2026 brackets, which match the Single brackets up to the 35% rate; the 35% bracket ends at $384,350 (Rev. Proc. 2025-32).
- State income tax = federal taxable income × flat state top-marginal rate (zero in no-tax states).
- Total tax = SE tax + federal income tax + state income tax. Quarterly / monthly planning figures divide total by 4 / 12. Amount due or refund subtracts federal/state withholding and quarterly amounts already paid when those fields are used.
2026 key constants
| Constant | Value in production |
|---|---|
| SS wage base | $184,500 |
| SS / Medicare / Additional Medicare rates | 12.4% / 2.9% / 0.9% |
| Net earnings adjustment | 92.35% |
| Standard deduction | $16,100 single & MFS; $32,200 MFJ; $24,150 HoH |
| QBI | Lesser of 20% of qualified business income or 20% of pre-QBI taxable income |
| State tax base | Federal taxable income (after QBI) |
Reconciled worked example (Denver)
Published fixture: gross 1099 income $96,400, business expenses $13,250, filing status single, state Colorado (flat 4.4%), QBI on, no miles / W-2 / withholding. Rounded dollars match calculate1099Tax.test.ts:
| Line | Amount (rounded) |
|---|---|
| Net SE income | $83,150 |
| SE tax total | $11,749 |
| QBI deduction (taxable-income limit binds; not 20% × $83,150) | $12,235 |
| Federal taxable income | $48,941 |
| Federal income tax | $5,625 |
| State income tax (CO 4.4% × federal taxable) | $2,153 |
| Total tax / quarterly planning figure | $19,527 / $4,882 |
State-tax approximation
All 50 states and DC are available. The engine multiplies federal taxable income by a single stored rate (examples: CA 9.3%, NY 6.85%, IL 4.95%, CO 4.4%, TX/FL/WA and other no-income-tax states 0%). Progressive brackets, locality taxes, and state-specific conformity adjustments are out of scope. Moderate incomes in progressive states are often overestimated relative to a full state return. The Chicago SEO Vitest fixture (Illinois flat rate on federal taxable income) is a second regression check alongside the Denver example above.
Filing-status handling
Standard deductions and Additional Medicare thresholds follow the selected status. Single, married filing jointly, and head of household each use their own 2026 bracket table. Married filing separately uses its own 2026 brackets, which match the Single brackets up to the 35% rate; the 35% bracket ends at $384,350 (Rev. Proc. 2025-32). Qualifying surviving spouse is not a separate control on this tool; use MFJ brackets only when that status truly applies on a return, or run the dedicated SE Tax Calculator when you only need Schedule SE.
Limitations
- QBI SSTB / Form 8995-A phase-outs and wage limitations are not modelled. The 20%-of-QBI side is Schedule C net profit minus the deductible half of SE tax, self-employed health insurance, and SEP or Solo 401(k) contributions.
- One W-2 field is used for AGI, the Social Security wage base, and Additional Medicare. Schedule SE uses Social Security wages (W-2 box 3), which can differ from box 1. A spouse's wages and SE income are not counted toward the joint Additional Medicare threshold.
- Health insurance and retirement contributions are used as entered. The Form 7206 net-profit limit and the SEP limit (about 20% of net SE earnings for your own account, up to $72,000 for 2026) are not applied.
- AMT, most credits, itemized deductions, and multi-state allocation are unsupported.
Results are estimates for planning purposes only. Consult a licensed CPA or Enrolled Agent for your actual tax liability.
Testing, updates, responsibility, corrections
Denver and Chicago fixtures pin QBI, federal tax, state tax, and totals to the dollar. Constants refresh with Rev. Proc. / SSA autumn releases. Publishing responsibility: FreelanceMath (organizational voice, no invented credentials). Corrections: freelancemath.mail@gmail.com.
Version log
- 2026-09-28: SE tax now uses Schedule C net profit only; health insurance and SEP or Solo 401(k) moved to AGI. W-2 wages reduce the Social Security wage base. Additional Medicare is capped at SE earnings and excluded from the deductible half. Head of household uses 2026 HoH brackets. Married filing separately uses its own 2026 brackets, which match the Single brackets up to the 35% rate; the 35% bracket ends at $384,350 (Rev. Proc. 2025-32). QBI is 20% of net profit after the deductible half of SE tax, health insurance, and retirement contributions. Added a Texas health insurance and SEP example.
- 2026-08-09: Corrected Rev. Proc. citation to 2025-32; rewrote QBI as Form 8995 taxable-income limitation (removed incorrect AGI subtraction); aligned state-tax base and HoH/MFS bracket notes with code; added Denver reconciled example and version log.
- 2026-05-18: Initial 1099 methodology page.