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How do you calculate taxes on a 1099?

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Income reported a 1099 form is generally treated as ordinary taxable income, according to the IRS, and must be added to the gross income before any adjustments are made on the 1040 or 1040EZ form. However, many individuals who receive 1099 forms also must pay additional self-employment taxes.

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Full Answer

People earning more than $400 in self-employment or contracted income as reported on a 1099 form must pay a self-employment tax, according to the IRS website. The tax is 15.3 percent on approximately 92 percent of that income amount and is figured using the IRS Schedule SE form. No taxes are withheld from earnings reported on a 1099 form. Some self-employed workers must file quarterly estimated taxes to compensate for the lack of tax withholding.

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