How Much to Save for Taxes on 1099 Income (2026)
Skip the mathSelf-employment tax calculator 2026When you work as a 1099 contractor or for a gig app, nobody takes tax out of your pay. You owe it at the end of the year, or in four payments during it. The simplest way to stay ahead is to move a fixed share of every payout into a separate account the day it arrives.
The short answer: for federal tax in 2026, a single filer should set aside about 15 to 20 % of profit up to $50,000, 20 to 22 % up to $100,000, and about 25 % at $150,000. Add your state income tax rate on top. Saving 30 % covers almost everyone.
How much to save, by profit
These figures come from the same math as our calculators: self-employment tax, the deduction for half of it, the standard deduction, the 20 % QBI deduction and the 2026 brackets. Single filer, no other income, federal tax only.
| Profit for the year | Federal tax | Share to set aside |
|---|---|---|
| $20,000 | $3,025 | 15 % |
| $30,000 | $5,181 | 17 % |
| $40,000 | $7,427 | 19 % |
| $50,000 | $9,732 | 19.5 % |
| $60,000 | $12,037 | 20 % |
| $75,000 | $15,495 | 21 % |
| $100,000 | $22,365 | 22 % |
| $150,000 | $37,608 | 25 % |
Married couples filing jointly with one self-employed spouse pay less: about 17 % on $60,000 of profit and 19.5 % on $100,000.
Even at $20,000 the share is 15 %. Self-employment tax is 15.3 % on 92.35 % of profit from the first dollar, and the standard deduction does not lower it. That is why gig workers with low income often owe tax when they expected a refund.
Profit, not gross pay
Profit is what you were paid minus business costs. For drivers, the biggest cost is usually the mileage deduction: 72.5¢ a mile from January to June 2026 and 76¢ from July. A driver paid $40,000 who drove 15,000 business miles has a profit of about $29,000, and owes about $5,000, not the $7,427 shown for $40,000.
If you do not track miles and expenses yet, take the percentage from gross pay. You will save too much, and the extra is yours after you file.
Add your state
Most states tax self-employment profit as ordinary income. A quick rule:
- No state income tax (Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, Wyoming): use the federal share above.
- Flat or low-rate states: add 3 to 5 points.
- High-tax states like California, New York or New Jersey: add 5 to 8 points at middle incomes.
Where to keep the money
Keep it out of the account you spend from. Two common setups:
- A separate savings account at your bank. Free and simple. Set an automatic transfer for your percentage each time a payout lands.
- A high-yield savings account at an online bank. Same idea, but the money earns interest for the months until the tax is due. On a few thousand dollars, that can be enough to cover a small part of the bill.
The interest is taxable income, and the bank sends you a Form 1099-INT. Avoid putting tax money in stocks or crypto: it might be worth less on the day you need it.
When to pay it
Setting money aside is half the job. The IRS expects payments during the year when you will owe $1,000 or more. For 2026 the due dates are April 15, June 15 and September 15, 2026, and January 15, 2027. If you wait until April 2027, you can owe an underpayment penalty even if you pay in full.
You avoid the penalty if you pay at least 90 % of this year’s tax, or 100 % of last year’s tax (110 % if last year’s AGI was over $150,000). Our quarterly estimated tax calculator works out each payment.
A simple routine
- Pick your percentage from the table, plus your state.
- Each time a payout arrives, move that share to the tax account.
- Four times a year, pay the IRS from that account through IRS Direct Pay or your online account.
- In April, file your return. What is left in the account after the last payment is yours.
For a number based on your own income and expenses, use the self-employment tax calculator. Gig drivers can use the calculator for their app: DoorDash, Uber, Lyft, Instacart, Amazon Flex or Spark.
Questions
Is 30 % enough to save for 1099 taxes?
For most single filers with federal tax only, 30 % of profit is more than enough up to about $150,000. It leaves room for state tax in most states. If your state has no income tax and your profit is under $60,000, 20 to 25 % is usually enough.
Should I save from gross pay or from profit?
From profit: what is left after business expenses and the mileage deduction. If you do not track expenses yet, saving the same percentage from gross pay is a safe overestimate.
Is it bad to keep tax money in my checking account?
It is not wrong, but it is easy to spend. A separate savings account makes the money harder to touch and earns interest until the tax is due. The interest is taxable income, reported on Form 1099-INT.
What if I already spent the money I should have saved?
File on time anyway, because the penalty for not filing is much bigger than the penalty for not paying. Pay what you can and ask the IRS for a payment plan. Then start setting aside a percentage from every payout.