The short answer
As a 1099 therapist, no taxes are withheld from your pay. You owe income tax plus self-employment tax for Social Security and Medicare, and you generally pay quarterly estimated taxes using Form 1040-ES. Keep records of income and business expenses, and talk with a tax professional about your situation.
What taxes do 1099 therapists pay?
Two main kinds:
- Income tax, like anyone else.
- Self-employment tax, which covers Social Security and Medicare. Employees split these with their employer; contractors pay both halves. The IRS sets the self-employment tax rate at 15.3%: 12.4% for Social Security, up to an annual wage limit, and 2.9% for Medicare. You can deduct the employer-equivalent half when figuring income tax. See IRS: Self-employment tax.
State and local taxes may apply too.
Do you have to pay quarterly?
Usually. Per the IRS's Form 1040-ES instructions, you generally must make estimated payments if you expect to owe at least the threshold amount the IRS sets after withholding and credits. For 2026, the due dates are:
| Payment | Due date |
|---|---|
| 1st | April 15, 2026 |
| 2nd | June 15, 2026 |
| 3rd | September 15, 2026 |
| 4th | January 15, 2027 |
How much should you pay each quarter?
The IRS's safe harbor rules can protect you from underpayment penalties if your payments plus withholding cover the smaller of:
- 90% of this year's tax, or
- 100% of last year's tax, or 110% if your prior-year adjusted gross income was over the IRS's high-income threshold.
Many therapists set aside a fixed percentage of every payment in a separate account. A tax professional can help you pick the right number.
What can you deduct?
Common business expenses for therapists may include:
- Malpractice insurance.
- License renewal fees and continuing education.
- Professional association dues.
- Telehealth equipment, software, and a portion of internet costs.
- A home office that meets IRS rules.
- Clinical consultation you pay for.
Keep receipts and a simple log. What's deductible depends on your situation.
If you also have a W-2 job
You can increase withholding at the W-2 job to cover some or all of the tax on your contract income, instead of, or in addition to, quarterly payments.
How ValorWell handles this
ValorWell therapists are 1099 contractors, so ValorWell doesn't withhold taxes from weekly pay. You'll receive the tax form for contractor income the IRS requires, and you're responsible for your own estimated payments.
Weekly pay makes cash flow predictable, which helps with setting aside tax money as you go.
Important limits
- This isn't tax advice. Talk with a CPA or enrolled agent about your situation.
- Thresholds and due dates change. Check the current Form 1040-ES each year.
- State taxes vary. Some states require their own estimated payments.