Self-Employed Tax Calculator &
1099 Estimator

As a sole proprietor, you pay 15.3% self-employment tax on every dollar of profit. An LLC taxed as an S-Corp lets you split your income into a salary and distributions. You pay SE tax only on the salary portion — distributions are exempt. For example, if your LLC earns $120,000 and you pay yourself an $80,000 salary, you only pay SE tax on $80,000 instead of the full $120,000, saving roughly $6,000. This strategy becomes worthwhile when net profit consistently exceeds $60,000–$70,000, because S-Corp administration adds roughly $1,500–$3,000 in annual costs.

The most commonly missed deduction is the home office deduction — if you use a dedicated space for work, a proportional share of your rent, mortgage interest, and utilities is deductible. Beyond that: health insurance premiums are often 100% deductible for self-employed workers, software subscriptions and equipment are fully deductible as business expenses, and business-related travel including mileage is deductible at the IRS standard rate. Every dollar in deductions reduces your net profit, which directly lowers both your income tax and your self-employment tax.