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Mixed Income Calculator

Calculate taxes when you have both W-2 employment and 1099 self-employment income

Build a runway for extra IRS payments with BudgetBuddy, line up payoff plans inside PaydownWise, and reconcile your payroll withholding with PayWise before quarter-end surprises show up.

Your Income

$

Your regular employment income

$

From your W-2 Box 2

$

Freelance, consulting, or gig work

$

Equipment, software, supplies for side work

💡 Note: We're using the standard deduction ($15,000) in this calculation.

Tax Summary

Total Income$72,082
Net Side Income$13,000
Self-Employment Tax$1,837
Total Federal Income Tax$7,472
Already Withheld (W-2) -$8,000
You Owe Additional Tax$1,309
Effective Tax Rate on Side Income10%

💼 Side Hustle Reality Check

Gross Side Income$15,000
After Expenses$13,000
After All Taxes$11,691

You Keep 78% of Side Income

After expenses and taxes, you net $11,691 from your $15,000 in side income.

If you work 10 hours/week on side income:

$22/hour

($11,691 ÷ 520 hours/year)

💡 Payment Options

Option 1: Make Quarterly Payments

Pay estimated taxes on your side income each quarter:

$328/quarter

Due: Apr 15, Jun 15, Sep 15, Jan 15

Option 2: Adjust W-2 Withholding

Increase your W-2 withholding to cover side income tax:

+$55/paycheck

(Assuming 24 paychecks per year)

Update your W-4 with your employer to add this amount.

⚠️ Important: Choose one method, not both! Either make quarterly payments OR adjust your W-2 withholding.

Disclaimer: This calculator provides estimates for educational purposes only. Tax laws are complex and individual circumstances vary. Consult a tax professional for personalized advice.

Understanding Mixed Income Taxation

How It Works

  • ✅ W-2 income is subject to income tax only (employer pays half of FICA)
  • ✅ 1099 income is subject to BOTH income tax AND self-employment tax (15.3%)
  • ✅ Self-employment tax applies ONLY to your net side income
  • ✅ Income tax applies to your COMBINED W-2 + 1099 income
  • ✅ You can deduct half of self-employment tax from your income

Common Scenarios

Full-time employee + freelancing

Most common: main job W-2 + side projects 1099

Part-time W-2 + gig work

Part-time employment + Uber, DoorDash, etc.

W-2 + rental income

Employment + self-managed rental properties

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💡 Pro Tips

  • Track expenses: Every legitimate business expense reduces your tax bill
  • Consider timing: If near year-end, defer income or accelerate expenses to optimize taxes
  • Set aside money: Save 10% of your side income for taxes
  • Quarterly payments: If side income is significant, make quarterly payments to avoid penalties
  • W-4 adjustment: If side income is stable, adjusting W-2 withholding is simpler than quarterly payments