As a 1099 per diem nurse, you are essentially a small business owner in the eyes of the IRS. Unlike a W-2 job where taxes are taken out for you, you are responsible for paying both the employer and employee portions of Social Security and Medicare, plus federal and state income taxes.
A safe rule of thumb is to save 25% to 35% of your net income for taxes.
Why the 25–35% Range?
Your total tax bill is made up of three primary layers:
Self-Employment (SE) Tax (15.3%): This covers Social Security ($12.4%) and Medicare ($2.9%). While W-2 employees split this with their employer, 1099 contractors pay the full amount. In 2026, the Social Security portion applies to the first $184,500 of your earnings.
Federal Income Tax (10–37%): This is a progressive tax based on your total taxable income. For most nurses, this falls in the 12% to 24% brackets.
State Income Tax (0–13%): This depends entirely on where you live. If you work in a state like Florida or Texas, you save 0%; in California or New York, you may need to save closer to the 35% mark.
How to Calculate Your Savings
You only pay taxes on your net income (Total Pay minus Business Expenses).
Step | Action |
| Deduct things like scrubs, stethoscopes, CEUs, licensing fees, and work-related mileage. |
2. Calculate Net | Gross income - Business expenses = Net profit |
3. Apply Percentage | Multiply your Net Profit by your target savings rate (e.g., 30%) |
Important Deadlines (Quarterly Estimated Taxes)
The IRS is a "pay-as-you-go" system. If you expect to owe more than $1,000 in taxes, you generally must make quarterly payments to avoid penalties. For the 2026 tax year, the deadlines are:
Q1: April 15, 2026
Q2: June 15, 2026
Q3: September 15, 2026
Q4: January 15, 2027