1099 vs W-2 take-home calculator

This is a planning estimate, not a tax return. Everything the model does — and everything it deliberately leaves out — is listed here, because a take-home number without its assumptions is not a useful number.

What it assumes

• Federal tax only, tax year 2026: the ordinary-income brackets and standard deduction for your filing status, plus statutory payroll tax (Social Security to the annual wage base, uncapped Medicare, and the Additional Medicare Tax above $200,000 single / $250,000 joint).
• Both columns work the same number of hours. Days off are paid on the W-2 side and unpaid on the 1099 side, where they reduce billable hours.
• Self-employment tax is computed on 92.35% of net profit, and one half of it (the Social Security and Medicare portions, not the Additional Medicare Tax) is deducted above the line.
• The health premium you buy as a contractor is deducted above the line, capped at your earned income from the business.
• Both columns report "cash after tax" on one definition — what is left of gross after taxes, business expenses, and insurance premiums, and before any retirement money is set aside — so the two are read against each other on the same basis.
• Net position adds to that cash only the retirement dollars an employer contributes: the match on the W-2 side. A contractor funding a SEP-IRA or solo 401(k) is moving cash already counted, not gaining extra, so it is shown as a call on that cash rather than added again.
• The standard deduction is applied to a single stream of earned income; the model assumes you do not itemize.
• Every input starts on a placeholder, not a benchmark. The two pay placeholders derive from this board’s typical W-2 band of $110K–$170K (config/niche/salary.ts) — replace them with your actual offers.

What it does not include

• State and local income tax. Rates, brackets, and local add-ons vary by jurisdiction and are not modeled — the estimate below is federal only, so both columns are overstated by whatever your state charges.
• The Section 199A qualified business income (QBI) deduction. Clinical practice is a specified service trade or business, so eligibility phases out with income and depends on facts this tool does not collect. Excluding it makes the 1099 column conservative.
• Retirement contributions as a deduction. Money you put into a SEP-IRA or solo 401(k) is treated here as cash out of pocket, not as a deduction — another conservative simplification on the 1099 side.
• Itemized deductions, dependents, credits, other income, and any income taxed at capital-gains rates. The model applies the standard deduction to a single stream of earned income.
• Quarterly estimated-payment timing, penalties, and entity choice (sole proprietor vs S corp). Electing S-corp treatment changes the self-employment tax picture materially and is out of scope.

Sources

• IRS — 2026 inflation-adjusted brackets and standard deduction
• Social Security Administration — 2026 contribution and benefit base
• IRS — Self-employment tax (Social Security and Medicare)

Model last reviewed July 29, 2026. This is an estimate for planning, not tax, legal, or financial advice — verify anything you act on with a qualified professional.