#23 · AL · 22 · Compensation & Offers

Freelance / 1099 Total Cost Calculator

Find the 1099 rate you truly need to match a W-2 salary — accounting for self-employment tax, the benefits gap, and business expenses. Tab 2 helps you discover and estimate every deduction available for tax year 2026.

⚖ Tax Notice Based on IRS regulations and standard federal/state tax rates as of tax year 2026 (IRC §1401, §164(f), §162). Effective tax rates are estimates; actual liability depends on your full tax picture. This tool does not constitute tax or legal advice — consult a tax professional for your specific situation.

W-2 Reference Income

W-2 Annual Salary ($)

Filing Status

State Income Tax Applied as blended effective rate. California and New York use refined progressive estimates.

Employer Benefits Value

Health insurance (annual employer share) $/yr

401(k) match % salary

Other benefits (PTO value, dental, vision...) $/yr

1099 / Self-Employment Profile

Annual Business Expenses ($) Home office, equipment, software, professional fees, etc. These reduce your taxable SE income.

Self-paid health insurance premiums ($/yr) 100% deductible if no employer plan available (IRC §162(l))

SEP-IRA contribution ($/yr) Up to 25% of net SE income, max $72,000 (2026). Reduces federal AGI.

Billable hours per week (for hourly rate) Used to convert annual rate to hourly equivalent

Billable weeks per year Accounts for vacation, admin time, and business development

Required 1099 Annual Gross to Match W-2 Take-Home + Benefits

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W-2 Take-Home Breakdown

1099 Take-Home Breakdown (at required gross)

Gap Analysis — What Drives the Premium

Est. Quarterly Tax Payments

Due: Apr 15 · Jun 16 · Sep 15 · Jan 15, 2027

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Income Context

Estimated 1099 Annual Gross ($) From Tab 1, or enter your expected contract rate. Used to cap retirement contributions.

State

Filing Status

2026 Deductions Checklist

Home Office (Simplified)

$5/sq ft, up to 300 sq ft = max $1,500/yr. Must be used regularly and exclusively for business.

sq ft (max 300)

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Vehicle / Business Mileage

IRS standard rate: $0.725/mile (2026). Client visits, business travel, supply runs.

business miles/yr

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Self-Employed Health Insurance

100% deductible if no employer plan available (IRC §162(l)). Includes dental and vision.

$/yr

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SEP-IRA Contributions

Up to 25% of net SE income, max $72,000 (2026). One of the most powerful freelancer deductions.

$/yr

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Professional Development & Education

Courses, certifications, conferences, books, and subscriptions directly related to your work.

$/yr

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Software, Tools & Subscriptions

Project management tools, design software, cloud storage, communication platforms, SaaS.

$/yr

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Internet & Phone (Business %)

Enter the business-use portion of your annual internet and phone bills.

$/yr

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Equipment & Hardware (Section 179)

Computers, monitors, peripherals purchased this year. Section 179 allows full expensing in year of purchase.

$/yr

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