1099 vs W-2 tax implications
Compare withholding, payroll taxes, deductions, and quarterly payments for mixed-income households.
Withholding difference
W-2 wages usually have federal withholding and employee payroll taxes taken out before the money reaches your bank account. 1099 income usually arrives gross, leaving tax prepayment to you.
That cash-flow difference is why the calculator focuses on what to set aside before each estimated tax deadline.
Payroll tax difference
Employees split Social Security and Medicare tax with an employer. Self-employed workers effectively pay both sides through self-employment tax, then deduct half of the regular SE tax when computing AGI.
For mixed-income households, the calculator stacks W-2 wages, self-employment income, spouse income, and other income before applying the bracket estimate.
How W-2 wages affect Social Security wage base
The Social Security wage base applies across covered earnings. W-2 wages can use part or all of that base before self-employment income is tested against it.
Entering W-2 income separately helps avoid overstating the Social Security part of self-employment tax when a user also has a job.
The guide explains the rule. The calculator shows how it changes your next quarterly payment.
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