Montana 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 Chan is a consumer subscription growth leader who has spent her career making premium services affordable and accessible. As Chief Growth Officer at Keeper, she drives growth for a platform that pairs AI with licensed tax professionals to help self-employed people keep more of what they earn. She has written more than 50 Keeper guides on tax strategy for freelancers, independent contractors, and small business owners. Previously, Krislyn was at Curology, where she helped turn dermatologist-grade custom skincare into a direct-to-consumer subscription used by millions.
Key takeaways
- 1099 income in Montana is subject to three taxes: 15.3% federal self-employment tax, 10% to 37% federal income tax, and 4.7% to 5.65% Montana income tax.
- Set aside 20–25% of your profit in a high-yield savings account, so the money earns interest until your tax payments are due. For a single filer with no other income, total tax runs from 21.0% of profit at $40,000 to 31.3% at $200,000.
- Montana cut its top income tax rate for 2026. The top rate fell from 5.9% to 5.65%, and the 4.7% rate now covers the first $47,500 of taxable income for single filers.
- Montana estimated payments start above $500. If you expect to owe more than $500 in Montana income tax, make quarterly estimated tax payments, due April 15, June 15, and September 15, 2026, and January 15, 2027.
- Montana has no general sales tax, so most self-employed people don’t charge one. A few resort towns, like Whitefish and West Yellowstone, add a local resort tax on lodging, restaurant meals, and some retail goods.
How much tax do 1099 workers pay in Montana?
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 | Montana income tax |
|---|---|---|---|---|---|
| $40,000 | $8,417 | 21.0% | $5,652 | $1,775 | $990 |
| $60,000 | $13,901 | 23.2% | $8,478 | $3,559 | $1,864 |
| $80,000 | $19,487 | 24.4% | $11,304 | $5,344 | $2,840 |
| $100,000 | $26,254 | 26.3% | $14,130 | $8,235 | $3,890 |
| $150,000 | $44,123 | 29.4% | $21,194 | $16,413 | $6,515 |
| $200,000 | $62,572 | 31.3% | $28,234 | $25,196 | $9,141 |
Married filing jointly, one self-employed spouse, 2026
| 1099 profit | Total tax | % of profit | Self-employment tax | Federal income tax | Montana income tax |
|---|---|---|---|---|---|
| $40,000 | $6,284 | 15.7% | $5,652 | $398 | $234 |
| $60,000 | $11,470 | 19.1% | $8,478 | $1,885 | $1,107 |
| $80,000 | $16,835 | 21.0% | $11,304 | $3,550 | $1,981 |
| $100,000 | $22,319 | 22.3% | $14,130 | $5,335 | $2,855 |
| $150,000 | $36,144 | 24.1% | $21,194 | $9,795 | $5,154 |
| $200,000 | $52,487 | 26.2% | $28,234 | $16,472 | $7,781 |
How Montana taxes 1099 income
If you’re a freelancer, independent contractor, gig worker, or solo business owner in Montana, your net profit (1099 income minus business expenses) is taxed three 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.
- Montana income tax: 4.7% to 5.65% on the same income the IRS taxes, plus your QBI deduction added back. You report it on Form 2.
What’s different about Montana
- It starts with federal taxable income. Montana uses the income on your federal return after the federal standard deduction, so you get the same $16,100 ($32,200 married) deduction on your Montana return.
- No QBI deduction. The IRS lets you deduct up to 20% of your business profit. Montana adds it back. At $80,000 of profit, that’s $11,650 you deduct on your federal return but still pay Montana tax on.
- Just two income tax brackets. A single filer pays 4.7% on the first $47,500 of taxable income and 5.65% on the rest. In 2027, the top rate drops to 5.4% and the 4.7% bracket widens to $65,000.
- Some federal deductions carry over. Because Montana starts with the income on your federal return, three deductions you take there also lower your Montana tax: half of your self-employment tax, self-employed health insurance premiums, and self-employed 401(k) contributions.
A self-employed person in Montana at $80,000 pays $19,487: about $227 more than in California and $2,840 more than in Texas, which has no income tax.
Montana income tax rates for 2026
Married couples filing jointly use income ranges twice as wide as single filers.
| Rate | Single or married filing separately | Married filing jointly |
|---|---|---|
| 4.7% | $0 – $47,500 | $0 – $95,000 |
| 5.65% | Over $47,500 | Over $95,000 |
Example: Montana tax on $80,000 of 1099 income
Here’s the math for a single self-employed person in Montana 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 Montana taxes: $46,599 plus the $11,650 QBI deduction added back | $58,248 |
| Montana income tax | $2,840 |
| Total 2026 tax | $19,487 (24.4%) |
Self-employment tax is the biggest piece. Every dollar you write off as a business expense lowers all three taxes, since your self-employment tax, federal income tax, and Montana income tax are all based on your profit after expenses.
What tax write-offs can I claim?
How to lower your Montana 1099 tax bill
At $80,000 of profit, every $1,000 of business expenses you deduct cuts about $283 from your total tax. Common write-offs for self-employed people in Montana 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 freeMontana estimated tax payments
If you expect to owe more than $500 in Montana income tax for 2026 that isn’t covered by withholding, make estimated payments to the Montana Department of Revenue online through the TransAction Portal or by mail. They’re due on the same dates as your federal payments, and each is a quarter of your Montana tax:
| Payment | Share of your Montana 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 Montana tax or 100% of last year’s in on-time payments. Montana has no higher bar for high earners. If you fall short, Montana charges interest on the underpayment.
- Some people are exempt. You don’t owe estimated payments if you didn’t have to file a Montana return last year, or if your Montana tax last year was zero.
Get your payment amounts with the Montana quarterly tax calculator.
Should you form an LLC or S corp in Montana?
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.
- LLCs cost $35 to form. The annual report is due by April 15 and costs $20, or $35 if you file late. Montana has waived the on-time fee for 2026 reports.
- 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.
6 sources
- HB 337: 2026–2027 Montana individual income tax changes (Montana Department of Revenue) · revenue.mt.gov
- 2026 Publication 1: A guide to Montana tax withholding and estimated tax · revenuefiles.mt.gov
- 2025 Montana Form 2 instructions · revenuefiles.mt.gov
- Business services filing fees (Montana Secretary of State) · sosmt.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.
