Worked example
A single 1099 locum physician with $350,000 of net income in a no-tax state
A single physician works locum tenens on a 1099 and nets $350,000 after business expenses. They live in a state with no income tax, enter no extra business deductions, and have not funded a retirement plan yet.
Inputs
| Annual gross income (net of business expenses) | $350,000 |
|---|---|
| Filing status | Single |
| Employment type | 1099 independent |
| State tax tier | No state tax |
| Business deductions | $0 |
| Current retirement contributions | $0 |
| Age 50 or older | No |
Calculator output
| Self-employment tax | $32,252 |
|---|---|
| Additional Medicare Tax (0.9%) | $1,109 |
| Adjusted gross income | $333,874 |
| QBI deduction | $0 |
| Taxable income | $317,774 |
| Federal income tax | $79,990 |
| State income tax | $0 |
| Total estimated tax (current estimate) | $113,351 |
| Effective rate | 32.4% |
| Take-home | $236,649 |
Self-employment tax applies to 92.35% of the $350,000. Social Security stops at the $184,500 wage base and Medicare does not. The 0.9% Additional Medicare Tax on the amount above $200,000 is a separate tax, so it is not part of the half that comes off income. Half of the self-employment tax leaves AGI of $333,874. After the $16,100 standard deduction, taxable income is above $276,750, where the QBI deduction for a medical practice is fully phased out. These figures are the calculator's "Current Estimate" column; the "Optimized Estimate" column is a rough what-if built on the planning assumptions listed below.