Methodology and sources

2026 federal numbers (verified)

• Standard deduction: $16,100 single / married filing separately, $32,200 married filing jointly, $24,150 head of household (IRS Rev. Proc. 2025-32).
• Tax brackets 10%–37%, e.g. single: 12% from $12,400, 22% from $50,400, 24% from $105,700, 32% from $201,775, 35% from $256,225, 37% from $640,600 (Rev. Proc. 2025-32).
• Social Security wage base: $184,500 (SSA).
• QBI (Section 199A) threshold: $201,750 ($403,500 MFJ), phase-in range $75,000 ($150,000 MFJ), $400 minimum deduction.
• Additional Medicare tax 0.9% above $200,000 single/head of household, $250,000 MFJ, $125,000 MFS (IRS Q&A; statutory, not inflation-indexed).
• Estimated-tax due dates: April 15, 2026; June 15, 2026; September 15, 2026; January 15, 2027 (2026 Form 1040-ES).
• Retirement limits: 401(k) elective deferral $24,500; catch-up $8,000 (age 50+), $11,250 (ages 60–63); Section 415(c) and SEP maximum $72,000 (IRS Notice 2025-67).

Sources

• IRS Rev. Proc. 2025-32 (brackets, standard deduction, QBI)
• SSA contribution and benefit base ($184,500)
• IRS 2026 Form 1040-ES (due dates)
• IRS Notice 2025-67 and IRS COLA table (retirement limits)
• IRS Additional Medicare Tax Q&A (thresholds)
• Tax Foundation 2026 state rates, Georgia DOR, Utah Code 59-10-104

Formulas

W-2: FICA = 6.2% × min(salary, $184,500) + 1.45% × salary (+0.9% above threshold). Taxable income = salary − standard deduction. Take-home = salary − FICA − federal − state tax. Total value adds employer health premium and 401(k) match.

1099: Gross = rate × hours × (weeks − PTO days ÷ 5). Profit = gross − expenses. SE tax = 12.4% × min(0.9235 × profit, $184,500) + 2.9% × 0.9235 × profit. AGI = profit − ½ SE tax − health insurance. QBI deduction = 20% of qualified income, limited to 20% of taxable income; above the threshold it is reduced linearly to zero across the phase-in range (we assume no W-2 wages or property, which is typical for solo contractors). Take-home = profit − all taxes − health insurance.

Break-even rate: the hourly 1099 rate (found by bisection, to the cent) where 1099 take-home equals W-2 take-home plus benefits.

State income tax

Every state uses its 2026 rate schedule, standard deduction and personal exemption from the Tax Foundation 2026 state income tax table (rates as of January 1, 2026). Georgia (4.99%, $15,000 / $30,000 standard deduction) comes from the Georgia DOR and Utah (4.45%) from Utah Code 59-10-104, because both cut rates retroactively after January 1.

• State taxable income = federal AGI − state standard deduction − personal exemption. Where a state gives a per-person credit instead (for example CA, OR, IA, NE), the credit is subtracted from tax.
• Single filers use the single schedule; married filing jointly uses the joint schedule. Head of household and married filing separately use the single schedule.
• No income tax on wages: AK, FL, NV, NH, SD, TN, TX, WA, WY. Massachusetts includes the 4% surtax above $1,083,150.
• Not modeled: local and county income taxes (NYC, Yonkers, Maryland counties, Indiana counties, Ohio/Michigan/Pennsylvania cities), phase-outs of exemptions and deductions at high income, benefit recapture (NY, CT), state deductions for federal tax paid (AL, MO), and other state-specific adjustments. Results can differ from your actual state return, mostly at high incomes.

Limitations

Health insurance defaults are rough averages (not verified against a survey). State unemployment (SUTA) in the report is a flat approximation. No credits, itemized deductions, retirement contributions, capital gains or other income are modeled. Estimates only. This is not tax, legal, or financial advice.