How to use it
- Enter your Schedule C net profit: gross receipts minus deductible business expenses.
- Choose your filing status and add any W-2 wages or other income.
- Tick the QBI box if you qualify for the 20% pass-through deduction.
- Use the quarterly figure as a starting point for your estimated tax payments.
The calculation, step by step
Net SE earnings = Net profit × 92.35%Social Security = 12.4% × min(net SE earnings, $184,500 − W-2 wages)Medicare = 2.9% × net SE earningsHalf-SE deduction = (Social Security + Medicare) ÷ 2The half-SE deduction lowers your adjusted gross income, which reduces income tax (not SE tax). Then the standard deduction and, if you qualify, the QBI deduction come off before the 2026 brackets are applied.
Example: $80,000 profit, single, no other income
| Net SE earnings (× 92.35%) | $73,880.00 |
| Self-employment tax (15.3%) | $11,303.64 |
| Half-SE deduction | −$5,651.82 |
| AGI | $74,348.18 |
| Standard deduction (single, 2026) | −$16,100.00 |
| Taxable income | $58,248.18 |
| Federal income tax | $7,526.60 |
| Total federal tax | $18,830.24 |
That is about $4,708 per quarter, or roughly 23.5% of profit, before any state income tax.
2026 estimated tax due dates
| Payment | Covers income earned | Due |
|---|---|---|
| Q1 | Jan 1 – Mar 31 | April 15, 2026 |
| Q2 | Apr 1 – May 31 | June 15, 2026 |
| Q3 | Jun 1 – Aug 31 | September 15, 2026 |
| Q4 | Sep 1 – Dec 31 | January 15, 2027 |
Lowering the number legitimately
- Track every deductible expense. Each dollar of expense saves 15.3% SE tax plus your income tax rate. The expense tracker sorts them by Schedule C line.
- Retirement contributions. A SEP-IRA or solo 401(k) cuts income tax, though not SE tax.
- Health insurance. Self-employed premiums are deductible from income, though not from SE tax.
- S-corp election. Once profit reliably tops about $50,000–$80,000, paying yourself a reasonable salary through an S-corp can save more than the added costs. Ask an accountant first.
When to hand it to a professional
Bring in a CPA or enrolled agent if you have several businesses, big swings in income, partners, inventory, employees, or income above the QBI threshold where the wage and property limits apply.