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Calculator methodology
The calculators are planning tools for a simplified 2026 sole-proprietor scenario. This page documents the shared method and the most important limits.
Core inputs
The common inputs are 1099 gross income, deductible Schedule C business expenses, and filing status. Net profit is gross income minus entered expenses, floored at zero for tax calculations. The tools do not model every line of Form 1040 or every state return.
Self-employment tax
The shared method applies the Schedule SE 92.35% adjustment, then the 12.4% Social Security and 2.9% Medicare components. The Social Security portion is capped at the stated annual wage base. If adjusted net earnings are below $400, self-employment tax is zero. Half of calculated self-employment tax is used as an income adjustment where the engine models it.
Federal income tax
Federal estimates use the site's stated 2026 ordinary-income brackets and standard deductions. The simplified QBI calculation is subject to the assumptions shown on each calculator. Unless a page expressly says otherwise, the tools do not fully model credits, other income, withholding, itemized deductions, dependents, high-income QBI limits, Additional Medicare Tax, net investment income tax, or alternative minimum tax.
State estimates
Important: state-model detail is not uniform. California and New York use more state-specific tax-table, schedule, credit, surcharge, or recapture logic. Many other state pages use a simplified representative-rate calculation applied to estimated adjusted income. Local income taxes, special deductions, credits, additions, subtractions, and household-specific rules may be excluded. Treat state results as planning estimates, not return-preparation figures.
Testing
- Low-income Schedule SE boundaries are tested around the $400 adjusted-net-earnings floor.
- Worked examples are reconciled to the live page formula.
- Bracket and surcharge transitions receive boundary tests where implemented.
- Blank, zero, and expense-equals-income inputs are checked for negative tax and invalid output.
- Structured data and internal links are parsed during release checks.
Sources and versioning
Primary federal references include IRS forms and instructions, revenue procedures, and SSA wage-base publications. State references should be read together with each page's disclosed simplifications. Material methodology changes are dated on the affected page or in this methodology.
Why we are not publishing a 51-state ranking dataset yet
A comparative dataset can look more precise than its underlying models. Because state calculation depth currently varies, we will not present the 51 state outputs as a uniformly verified ranking. A future dataset should follow state-by-state validation against official computation methods and publish model coverage alongside every result.
Last updated: July 20, 2026.