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//// Tax · Withholding

Tax Withholding Gap

Mixed W2 + 1099? Find out if you're on track to underpay or overpay federal tax — and exactly how much to send each remaining quarter.

Where this fits

📦 Business & Seller OpsGoing 1099FreelancersEmployees

This tool lives inside Going 1099 and is most useful for freelancers and employees.

SE Tax Rate15.3%
QBI Deduction20%
Quarterly DeadlinesApr · Jun · Sep · Jan

You're on track to underpay by $19,382. Pay $6,461 each of the next 3 quarters to close the gap and avoid the §6654 underpayment penalty.

Total expected tax: $31,507 • Total expected withholding: $12,125.

Total federal tax
$31,507
SE tax + income tax
Total withholding
$12,125
W2 + est. payments
Underpayment
-$19,382
Owed at filing
Per-quarter to fix
$6,461
3 quarters left
Filing status

W2 Income

1099 / Self-Employment

Year-end snapshot

Total income$145,000
Standard deduction−$15,000
Taxable income$125,761
Marginal rate24%
Federal income tax$23,030
SE tax$8,478
Total tax$31,507
− Total withheld$12,125
Owed$19,382

Disclaimers

  • Federal only — state tax not modeled
  • Assumes no 1099 expense deductions (worst case)
  • QBI deduction not modeled — could reduce tax
  • Uses 2025 IRS brackets (Rev. Proc. 2024-40)
1

Total projected income

Gross = projected W2 + projected 1099

= $85,000 + $60,000 = $145,000

IRS Form 1040, Lines 1a + 8 (Schedule 1)

2

Self-employment tax (Schedule SE)

SE tax = 1099 income × 92.35% × 15.3%

$60,000 × 0.9235 × 0.153

= $8,478

12.4% Social Security + 2.9% Medicare. Schedule SE line 12.

IRS Schedule SE; IRC §1401

3

Half SE tax deduction (above the line)

Deduction = SE tax ÷ 2

= $4,239

Subtract from gross to get AGI. Schedule 1 Line 15.

IRC §164(f)

4

Adjusted Gross Income (AGI)

AGI = W2 + 1099 − ½ SE tax

= $140,761

5

Standard deduction

Std deduction (Single, 2025)

= $15,000

IRS Rev. Proc. 2024-40 (2025 inflation adjustments)

6

Taxable income

Taxable = AGI − standard deduction

= $125,761

7

Federal income tax (brackets)

Apply 2025 progressive tax brackets to taxable income

= $23,030

Marginal rate: 24% • Effective rate: 21.7% of total gross

IRC §1; Rev. Proc. 2024-40

8

Total federal tax owed

Total = SE tax + federal income tax

= $8,478 + $23,030 = $31,507

9

Projected full-year W2 withholding

Projected wh = YTD wh ÷ (YTD wages ÷ projected wages)

$3,500 ÷ ($28,000 ÷ $85,000)

= $10,625

Assumes your withholding rate stays constant for the rest of the year.

10

Total expected payments

Expected = projected W2 wh + estimated payments YTD

= $10,625 + $1,500 = $12,125

11

The gap

Gap = total federal tax − total expected payments

= Underpaid by $19,382 🔴

Safe harbor: pay 90% of current year OR 100% of prior year (110% if AGI > $150k) to avoid penalty.

IRC §6654 (estimated tax safe-harbor)

12

Recommended quarterly payment

Quarterly = max(0, gap) ÷ remaining quarters

$19,382 ÷ 3

= $6,461

1040-ES quarterly due dates: Apr 15, Jun 15, Sep 15, Jan 15 (next year).

IRS Form 1040-ES

Key insight

IRS §6654 imposes an underpayment penalty if you owe over $1,000 at filing AND haven't paid the safe-harbor minimum (90% current-year or 100% prior-year, 110% if AGI > $150k). Send $6,461 via IRS Direct Pay each remaining quarter to stay clear.

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