Being a 1099 contractor means you are self-employed by IRS definition. You pay 15.3% FICA tax - Social Security and Medicare - in addition to income tax. You only pay 7.65% FICA as an employee because your employer covers the other half, and that is automatically withheld from each paycheck, so you don't really notice it. We have some great resources here at our Self-Employment Tax Hub that may help you going forward. You can either start paying quarterly estimated taxes based on your projected profit, or you can adjust your W-2 withholding to cover the additional tax burden.
As an example: If you have $20,000 profit for the year your self-employment tax would be calculated on schedule SE as 20,000 x .9235 = 18,470 x .153 = 2,825.91 plus your overall income tax rate, this will be based on your overall taxable income. So if it's, say, 12%, 20,000 x .12 = 2,400. The total tax generated by the self-employed income would be $5,225.91. This is only on the self-employment income, not the W-2 income.
@KD416 Many people are caught off guard by this when they start side jobs.
Hope this helps!
Cindy
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