Indiana 1099 taxes: a 2026 guide for the self-employed
Keeper StaffKeeper is a delightfully smart tax filing software that's especially useful for people with 1099 contracting and freelance income. Our blog breaks down IRS guidance with real-world examples and analysis by tax professionals — empowering taxpayers to save money and take control of their finances.
Krislyn ChanKrislyn is Chief Growth Officer at Keeper. At Keeper, she strives to make expert-level tax strategies that used to require a traditional CPA accessible to all. Prior to Keeper, she was at Curology, where she helped bring custom, prescription-grade skincare out of the dermatologist's office to millions of faces.
Key takeaways
- 1099 income in Indiana is subject to four taxes: 15.3% federal self-employment tax, 10% to 37% federal income tax, a flat 2.95% Indiana income tax, and a county income tax of 0.5% to 3%.
- Set aside 25–30% of your profit in a high-yield savings account, so the money earns interest until your tax payments are due. In Indianapolis, for a single filer with no other income, total tax runs from 23.1% of profit at $40,000 to 31.3% at $200,000.
- Every Indiana county taxes income. Rates run from 0.5% in Porter County to 3% in Randolph County. Marion County (Indianapolis) charges 2.02%. The calculator uses the Marion County rate.
- Indiana estimated payments start at $1,000. If you expect to owe more than $1,000 in state and county tax, make quarterly estimated tax payments, due April 15, June 15, and September 15, 2026, and January 15, 2027.
- Indiana’s income tax rate keeps falling. It’s 2.95% for 2026, down from 3% in 2025, and drops to 2.9% in 2027.
How much tax do 1099 workers pay in Indiana?
These tables show estimated 2026 tax on self-employment profit, the amount left after business expenses. They assume this is your only income, you take the standard deduction, and you have no kids or tax credits.
Single filer, 2026
| 1099 profit | Total tax | % of profit | Self-employment tax | Federal income tax | Indiana income tax | County tax (Marion, 2.02%) |
|---|---|---|---|---|---|---|
| $40,000 | $9,225 | 23.1% | $5,652 | $1,775 | $1,067 | $731 |
| $60,000 | $14,759 | 24.6% | $8,478 | $3,559 | $1,615 | $1,106 |
| $80,000 | $20,293 | 25.4% | $11,304 | $5,344 | $2,164 | $1,482 |
| $100,000 | $26,934 | 26.9% | $14,130 | $8,235 | $2,712 | $1,857 |
| $150,000 | $44,486 | 29.7% | $21,194 | $16,413 | $4,083 | $2,796 |
| $200,000 | $62,619 | 31.3% | $28,234 | $25,196 | $5,454 | $3,735 |
Married filing jointly, one self-employed spouse, 2026
| 1099 profit | Total tax | % of profit | Self-employment tax | Federal income tax | Indiana income tax | County tax (Marion, 2.02%) |
|---|---|---|---|---|---|---|
| $40,000 | $7,798 | 19.5% | $5,652 | $398 | $1,038 | $711 |
| $60,000 | $13,035 | 21.7% | $8,478 | $1,885 | $1,586 | $1,086 |
| $80,000 | $18,450 | 23.1% | $11,304 | $3,550 | $2,134 | $1,461 |
| $100,000 | $23,984 | 24.0% | $14,130 | $5,335 | $2,683 | $1,837 |
| $150,000 | $37,819 | 25.2% | $21,194 | $9,795 | $4,053 | $2,776 |
| $200,000 | $53,845 | 26.9% | $28,234 | $16,472 | $5,425 | $3,714 |
How Indiana taxes 1099 income
If you’re a freelancer, independent contractor, gig worker, or solo business owner in Indiana, your net profit (1099 income minus business expenses) is taxed four ways:
- Federal self-employment tax: 15.3% on most of your profit (92.35% of it). That’s 12.4% for Social Security, on earnings up to $184,500 in 2026, plus 2.9% for Medicare with no cap. It replaces the payroll taxes an employer would split with you. Estimate it with the self-employment tax calculator.
- Federal income tax: 10% to 37% on what’s left after three deductions: the $16,100 standard deduction ($32,200 married filing jointly), half of your self-employment tax, and the 20% QBI deduction.
- Indiana income tax: a flat 2.95% on your profit minus half of your self-employment tax and a $1,000 exemption for each person on your return. You report it on Form IT-40.
- County income tax: 0.5% to 3% on the same income, at the rate for the county you lived in on January 1. You pay it on your Indiana return, not separately.
What’s different about Indiana
- No standard deduction. Indiana taxes your income from almost the first dollar. Instead of a standard deduction, you get a $1,000 exemption for yourself, your spouse if you file jointly, and each dependent.
- The county tax adds up. At $80,000 of profit, the Marion County tax is $1,482, on top of $2,164 of Indiana tax.
- No QBI deduction. The IRS lets you deduct up to 20% of your business profit. Indiana doesn’t. At $80,000 of profit, that’s $11,650 you deduct on your federal return but still pay Indiana and county tax on.
- Some federal deductions carry over. Because Indiana starts with the income on your federal return, three deductions you take there also lower your Indiana tax: half of your self-employment tax, self-employed health insurance premiums, and self-employed 401(k) contributions.
A self-employed person in Indianapolis at $80,000 pays $20,293: about $1,032 more than in California and $3,645 more than in Texas, which has no income tax.
Indiana county income tax rates for 2026
Your county tax is based on where you lived on January 1, 2026. Here are the rates in Indiana’s largest counties:
| County | Major city | 2026 rate |
|---|---|---|
| Marion | Indianapolis | 2.02% |
| Lake | Gary, Hammond | 1.5% |
| Allen | Fort Wayne | 1.59% |
| Hamilton | Carmel, Fishers | 1.1% |
| St. Joseph | South Bend | 1.75% |
| Elkhart | Elkhart | 2% |
| Tippecanoe | Lafayette | 1.28% |
| Vanderburgh | Evansville | 1.25% |
| Monroe | Bloomington | 2.14% |
The Indiana Department of Revenue lists all 92 county rates in Departmental Notice #1.
Example: Indiana tax on $80,000 of 1099 income
Here’s the math for a single self-employed person in Indianapolis with $80,000 of profit and no other income.
| Step | Amount |
|---|---|
| Self-employment tax: $80,000 × 92.35% × 15.3% | $11,304 |
| $80,000 minus half of self-employment tax | $74,348 |
| Income the IRS taxes: $74,348 minus the $16,100 standard deduction and $11,650 QBI deduction | $46,599 |
| Federal income tax | $5,344 |
| Income Indiana taxes: $74,348 minus the $1,000 exemption | $73,348 |
| Indiana income tax: 2.95% | $2,164 |
| Marion County tax: 2.02% | $1,482 |
| Total 2026 tax | $20,293 (25.4%) |
Self-employment tax is the biggest piece. Every dollar you write off as a business expense lowers all four taxes, since they’re all based on your profit after expenses.
What tax write-offs can I claim?
How to lower your Indiana 1099 tax bill
At $80,000 of profit, every $1,000 of business expenses you deduct cuts about $277 from your total tax. Common write-offs for self-employed people in Indiana include:
- Your phone and internet, for the share you use for work
- Car expenses, using a set rate per mile or your actual costs (compare the two)
- A home office, if you use part of your home regularly and only for work (estimate yours)
- Software, equipment, and supplies you buy for your business
- Health insurance premiums you pay as a self-employed person
- Retirement contributions to a SEP-IRA or Solo 401(k)
Most of these are small purchases spread across a year of bank and card statements, which is where they get missed. See the full list of tax write-offs for self-employed people.
Track and claim every eligible deduction with Keeper
Keeper scans your accounts for write-offs and files your return — with tax pros reviewing every one.
Try it freeIndiana estimated tax payments
If you expect to owe more than $1,000 in Indiana and county tax that isn’t covered by withholding, make estimated payments to the Indiana Department of Revenue online through INTIME or with Form ES-40. They’re due on the same dates as your federal payments, and each is a quarter of your Indiana and county tax:
| Payment | Share of your Indiana tax | Due date |
|---|---|---|
| 1st | 25% | April 15, 2026 |
| 2nd | 25% | June 15, 2026 |
| 3rd | 25% | September 15, 2026 |
| 4th | 25% | January 15, 2027 |
- Federal payments are separate: you pay the IRS on the same four dates with Form 1040-ES.
- To avoid a penalty for paying too little, pay at least 90% of this year’s tax or 100% of last year’s, whichever is less, in on-time payments. If your 2025 federal AGI was over $150,000 ($75,000 married filing separately), the prior-year amount rises to 110%.
- The penalty is 10% of the amount you underpaid for each quarter.
Get your payment amounts with the Indiana quarterly tax calculator.
Should you form an LLC or S corp in Indiana?
You don’t need one to work as an independent contractor. If you work for yourself without forming a business, you report 1099 income on Schedule C, part of your regular tax return, and pay the taxes above. Indiana is one of the cheaper states to set one up:
- LLCs cost $95 to form online ($100 by mail) and $31 every two years for the business entity report ($50 by mail).
- S corps can make sense once your profit is around $80,000, when the self-employment tax savings get significant. You pay yourself a reasonable salary and take the rest as profit payouts (distributions) that aren’t subject to self-employment tax.
Run the numbers for your income to see what you’d save.
Do self-employed people in Indiana charge sales tax?
Usually not. Most professional services, like writing, design, consulting, and bookkeeping, aren’t taxable in Indiana. Physical goods are, at a flat 7% everywhere in the state, since Indiana has no local sales taxes.
7 sources
- Departmental Notice #1: 2026 state and county income tax rates · in.gov
- Estimated payments (Indiana Department of Revenue) · in.gov
- 2026 Form ES-40: estimated tax payment form · forms.in.gov
- Business entity reports (Indiana Secretary of State) · in.gov
- IC 23-0.5-9: business filing fees · iga.in.gov
- IRS releases tax inflation adjustments for tax year 2026 · irs.gov
- Contribution and benefit base · ssa.gov
This article is for informational purposes only and isn’t tax, legal, or financial advice. Tax rules change and depend on your situation, so talk to a tax professional about yours.
