The Side Hustle — 1099 Calculator
See what your 1099 income really costs in federal, state, and local tax — then compare ten ways to shelter it and find the strategy that leaves you the most money in ten years.
01Your numbers
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Puerto Rico — read this first
These numbers assume you are a bona fide resident of Puerto Rico under IRC §937 — the presence test, the tax-home test and the closer-connection test, all three — and that the work is performed on the island. Services income is sourced where the work is done, so reading from San Juan for mainland clients is PR-source and drops out of the federal income tax under §933. Reading from Portland for a PR client does not.
Self-employment tax does not go away. That is the part most summaries skip. Without a decree, PR frequently costs a high earner more than Texas or Washington, because the 15.3% stays and Puerto Rico's own rates reach 33%.
With a decree the practice bills through a PR entity: 4% on net export-services income, exempt distributions, and a reasonable salary to you at regular PR rates. There is no bright-line figure for "reasonable", so this model draws the greater of $100,000 and a third of net profit — change that assumption and the answer moves. A decree is an application, not a checkbox, and the individual resident-investor chapter was rewritten by Act 38-2026, which is outside what this page can verify. Treat the decree line as an illustration and price it with PR counsel.
Examples of deductible business expenses — tap any to learn more:
The employee-deferral limit ($24,500) is shared across all your jobs, so day-job deferrals shrink the employee portion of a solo 401(k). Employer-side contributions are not affected.
Advanced: other income & deductions ▸
Add other income types and deductions for a fuller picture. These are taxed on their own tracks — capital gains and qualified dividends at preferential rates, investment income may trigger the 3.8% NIIT, and rental income skips self-employment tax. Leave blank to ignore.
State & local income tax counts toward itemized deductions too, capped at $40,400 (2026). The calculator adds that automatically when you itemize.
Growth & rate assumptions ▸
02This year's tax burden — before & after
Each color is one layer of tax. The second column shows the same year with the optimal strategy's deduction applied.
03What the side hustle itself costs
Taxes caused by the 1099 income alone — your total bill minus what you'd owe with no side hustle.
04Strategy showdown — where should the money go?
Every year, all 1099 profit left after taxes goes into the strategy. Pre-tax plans are filled to their annual maximum first (which itself lowers the tax bill), and whatever cash remains simply stays in the bank earning savings-account interest. Bars show projected after-tax value at 5 and 10 years, using your state and local rules.
Swipe the table sideways to see 5- and 10-year values →
05The optimal mix — best combination of strategies
Every retirement plan paired with every destination for the leftover cash — 30 combinations, all simulated. This is the one that leaves you the most after-tax money at 10 years.
Swipe the table sideways to see 5- and 10-year values →
06Best strategy at every income level
The same 10-year simulation, repeated across the whole income range (your expense input held fixed). Each column’s height is the winning strategy’s after-tax value at 10 years; its color tells you which strategy is #1 at that level of 1099 income.