How we calculate

Method and sources · Last updated 4 October 2026

1. Where the numbers come from

Federal parameters come from published IRS material: the annual revenue procedure that sets the standard mileage rates and inflation adjustments, the Schedule SE instructions, the standard-deduction and bracket tables, and the Section 199A rules for the qualified business income deduction. State parameters come from each state’s revenue department schedule for the relevant tax year.

These tables are held in a single local file served with the page. Nothing is fetched from a tax authority at runtime, which is why the calculator keeps working with no network connection once the page has loaded.

2. The order of calculation

Every figure is produced by the same sequence, which mirrors how a return is actually assembled:

1. Gross earnings from all 1099-NEC and 1099-K forms, entered before platform fees are deducted.
2. Business deductions — the mileage deduction or actual vehicle expenses, platform and cash-out fees, phone business share, gear, cleaning, and the passenger or delivery costs shown for your work type.
3. Net profit — gross less those deductions. This is the Schedule C bottom line, and it is the figure everything else is built on.
4. Self-employment tax — Social Security and Medicare on 92.35% of net profit, with the Social Security portion capped at the annual wage base.
5. Adjusted gross income — net profit, less the deductible half of self-employment tax, less the self-employed health insurance deduction, less retirement contributions.
6. Federal income tax — AGI less the standard deduction, less the qualified business income deduction, run through the brackets for your filing status, then reduced by any Child Tax Credit you qualify for.
7. State income tax — the state’s own treatment, described in section 5.
8. What is still owed — total tax less anything already paid: W-2 withholding, or self-employment tax already remitted through quarterly estimates.

3. The mileage deduction

If you use the standard mileage rate, your deduction is your business miles multiplied by the IRS rate for the period you drove them. The IRS has published a split rate every year since 2022: one rate for January to June and a different one for July to December. The calculator therefore asks for those two periods separately, because collapsing them into one annual figure produces a wrong deduction for anyone whose driving is not evenly spread.

Choosing the standard mileage rate instead of actual expenses means you cannot separately deduct gas, oil, repairs, insurance or depreciation — the rate already includes them. You can still deduct parking and tolls, the business share of your phone, and the equipment your work requires. The calculator enforces this by asking for one set of inputs or the other, not both.

4. Self-employment tax

Self-employment tax is Social Security at 12.4% plus Medicare at 2.9%, charged on 92.35% of net profit. The 92.35% exists because a self-employed person effectively gets the employer’s half of the tax as a deduction before it is applied.

The Social Security portion only applies up to the annual wage base. If you also have a W-2 job, that job’s wages use up the base first — so the calculator asks whether you have a W-2 job and how much it paid. This is one of the most commonly missed items in gig tax, and getting it wrong usually overstates the bill.

An additional 0.9% Medicare surtax applies above the statutory income threshold for your filing status. The calculator applies it.

5. State income tax — and an honest distinction

This is where the calculator is deliberately least precise, and you should know exactly how:

• California and New York use their real graduated brackets, including their standard deductions.
• Every other state and the District of Columbia is approximated from a single planning rate per jurisdiction. That rate is chosen to reflect the state’s typical effective burden for a gig-income earner, not to reproduce its bracket schedule line by line.

Nine states levy no individual income tax at all on this kind of income, and for those the state figure is simply zero. Where a state has a flat rate, that rate is used.

If you need a state return prepared to the dollar, this tool is not the right instrument for that state. It is designed to tell you the order of magnitude and whether you are likely to owe, which is the decision most drivers actually face in January.

6. Projected versus published years

Official IRS figures for a year are published shortly before that year begins. If you select a year for which they have not been published, the calculator applies projected baselines and says so in an amber notice at the top of the results. It never presents a projection as a published rate.

7. The qualified business income deduction

Section 199A generally lets a self-employed person deduct 20% of qualified business income. For a sole proprietor with no employees this usually simplifies to 20% of taxable income before the deduction, and it stacks on top of the standard deduction rather than replacing it.

Above the statutory income threshold, the real deduction becomes subject to additional limits based on W-2 wages paid and the basis of qualifying property. The calculator does not apply those limits. It flags that they exist but continues to use the simpler 20%. The practical consequence is that for a filer above the threshold, the displayed figure is a lower bound: your real deduction may be smaller and your tax correspondingly higher. This is stated in the on-page disclaimer as well, and it is the single most important limitation on this page.

8. What "already paid" means

The headline figure is what is still to pay, not your total liability. The calculator subtracts federal and state tax withheld from a W-2 job, and any self-employment tax you have already remitted through quarterly estimates. A negative result is a refund, and is shown as one.

9. What the calculator does not model

Each of these can change what you actually owe. They are listed here rather than omitted, so that you can judge whether you need professional help:

• Local and municipal income tax. City and county income taxes exist in parts of several states. Where they do, the tool displays a notice naming the state, because the state figure is a floor rather than the whole story.
• New York City and Yonkers local tax. The New York figure is state tax only.
• Multi-state filing and reciprocity agreements. If you worked across state lines, live in one state and work in another, or moved mid-year, your state liability may be split between two or more states. The tool computes one state.
• S-corporation elections. An LLC taxed as an S-corp can reduce self-employment tax by splitting a reasonable salary from distributions. That is a significant lever above a certain profit level, and it is outside this tool's scope entirely. The calculator will not produce a figure for it, because a wrong S-corp number is worse than no number.
• The excess business loss limitation. Not modelled.
• Credits beyond the Child Tax Credit — the Earned Income Tax Credit, the Saver’s Credit, education credits, and the rest.
• State credits and state-specific deductions beyond the standard deduction figure shown.
• Depreciation recapture if you switch between the mileage and actual-expense methods across years, or sell a vehicle you depreciated.
• Cash-basis timing differences — income earned in December and paid in January, or an invoice still unpaid at year end.

10. How the estimate is tested

The calculation engine is checked against worked scenarios with independently computed expected values, run automatically against the rendered page. Each state page displays a full worked example generated from the same engine, so its figures and the calculator's figures come from one calculation path rather than two that can drift apart.

When a rate changes and the table is updated, the state pages are regenerated from it. Where a figure used to be typed by hand, it is now computed — because hand-typed figures are how a site quietly goes stale.

11. Corrections

If a figure here is wrong, we want to know. Send the state, the tax year, the inputs you used, and what you expected instead to [email protected].

12. The limit of all of this

This is a planning estimate produced from published rate tables. It is not tax advice, it is not a filed return, and it cannot account for circumstances it never asked you about. Confirm anything with real consequences with a licensed tax professional or the IRS directly. Read the full Disclaimer.