✍️ FinZelo Editorial Team 📅 September 2026 ⏱️ 8 min read
📌 Key Takeaway: Self-employed workers pay both the employer and employee share of Social Security and Medicare taxes (self-employment tax, 15.3% combined), file Schedule C for business income, and generally must make quarterly estimated tax payments rather than relying on withholding.

What Makes Self-Employment Taxes Different

As a self-employed worker, no employer withholds tax from your pay, so the responsibility shifts entirely to you — both for calculating what you owe and for paying it throughout the year rather than in one lump sum at filing time.

Self-Employment Tax Explained

Self-employment tax covers Social Security and Medicare — 15.3% combined (12.4% Social Security up to the annual wage base, plus 2.9% Medicare) — since a self-employed worker pays both the 'employer' and 'employee' halves that a traditional job would split. You can deduct half of this tax when calculating your adjusted gross income.

Quarterly Estimated Taxes

If you expect to owe $1,000 or more in tax for the year, the IRS generally requires quarterly estimated payments (typically due in April, June, September, and January) rather than one annual payment. Missing these deadlines can trigger an underpayment penalty even if you pay everything owed by the filing deadline.

Common Deductions for the Self-Employed

  • Home office deduction — a portion of rent/mortgage, utilities, and insurance for space used regularly and exclusively for business
  • Health insurance premiums — often deductible for self-employed workers who aren't eligible for an employer plan
  • Business mileage and vehicle expenses — tracked mileage or actual expenses for business use of a vehicle
  • Retirement contributions — SEP-IRA or Solo 401(k) contributions can meaningfully reduce taxable income
  • Software, supplies, and business subscriptions — ordinary and necessary costs of running the business

Which Software Fits

TaxSlayer's self-employed tier and TurboTax Self-Employed are both built around Schedule C filing, mileage tracking, and quarterly estimate calculations — worth comparing directly against each other if 1099 income is your main tax complexity.

This page is for educational purposes and isn't personalized tax advice. Tax rules, brackets, and deadlines are set annually by the IRS and subject to change — confirm current figures at irs.gov or with a tax professional before filing.