Quarterly taxes for a 1099 NEMT driver: what to set aside, the mileage deduction, and the due dates

Why is nothing withheld from a 1099 driver’s pay?

A company that pays a contractor does not take out income tax or Social Security, so the driver pays both directly, four times a year. The IRS calls this estimated tax: the way to pay on income that has no withholding, including self-employment income. If you drive on a W-2 instead, your employer’s withholding does this job. The 1099 or W-2 guide explains how the agencies decide which one you are, and the tax guide for NEMT owners covers a company owner’s own payments.

The company reports what it paid you on a Form 1099-NEC when the total reaches $2,000 for payments made in 2026, and it is due to you by January 31, which is February 1, 2027 for 2026 payments because January 31 is a Sunday. Box 1a, nonemployee compensation, shows what you were paid for services. It does not show your costs, which go on Schedule C, and a missing form does not remove the tax. A driver with $400 or more in net self-employment earnings owes self-employment tax and files Schedule SE either way.

How much tax does a 1099 driver owe on each dollar of profit?

A single driver with no other income owed between 17 and 21 percent of net profit in federal tax in this 2026 example. Two taxes make up that figure.

• Self-employment tax. 15.3 percent, which is the employee and employer shares of Social Security and Medicare together, applied to 92.35 percent of net profit. The Social Security part stops at $184,500 of earnings for 2026. You deduct half of the tax when you figure your income.
• Income tax. The 2026 standard deduction for a single filer is $16,100, and the tax brackets start at 10 percent up to $12,400 and 12 percent up to $50,400. Sole proprietors can also take the qualified business income deduction, which is up to 20 percent of qualified business income (net profit less the deductible half of self-employment tax) and no more than 20 percent of taxable income before the deduction.

The table runs those rules at three levels of net profit, which is what is left after your vehicle costs and other business expenses. It assumes a single filer, no other income, no credits, the standard deduction and the qualified business income deduction at its cap. The totals leave out state income tax and round to the dollar. Your return will differ with your filing status and other income.

To see the middle row worked out: $48,000 of profit gives self-employment tax of $6,782 and a deduction for half of it, $3,391. Take away the standard deduction and a qualified business income deduction of $5,702, and taxable income is $22,807. Income tax on that is $2,489, and the two taxes total $9,271. A simple habit follows: move about 20 percent of your net profit into a separate account as each payout arrives, add your state’s rate, and true it up at each due date.

What are the quarterly due dates, and how do you pay?

Payments for 2026 income fall on the 15th of April, June and September, and on January 15, 2027. The September date has passed, so the next payment is due January 15, 2027. That installment is optional when the 2026 return is filed by February 1, 2027 with the balance paid in full. When a date falls on a weekend or legal holiday, a payment on the next business day is on time.

You generally must pay when you expect to owe at least $1,000 for the year after withholding and credits and your withholding will fall short of the smaller of two figures: 90 percent of the tax on this year’s return or 100 percent of the tax on last year’s. Reaching that smaller figure is also what keeps the underpayment penalty away. The 100 percent becomes 110 when last year’s adjusted gross income was over $150,000.

Ways to pay:

• IRS Direct Pay. A free transfer from a checking or savings account at IRS.gov/Payments.
• Your IRS online account. It also shows your payment history.
• Card or digital wallet. The processors charge a fee.
• EFTPS. You must enroll first.
• A check with the voucher. Mail one Form 1040-ES voucher per due date.

If your income is uneven, or you start driving mid-year, the annualized income installment method on Form 2210, Schedule AI, matches each payment to when you earned the money instead of splitting the year into equal quarters.

What vehicle costs can a 1099 driver deduct?

In your own van you deduct either the standard mileage rate or your actual costs, never both in the same year. For 2026 the IRS allows 72.5 cents for each business mile before July 1 and 76 cents from then on, a mid-year raise it tied to fuel prices. A driver in a company van has no vehicle costs to deduct except what they pay out of pocket and are not repaid for.

The rate covers depreciation, repairs and maintenance, gas, oil, insurance and registration, and 35 cents of each mile is treated as depreciation, which lowers the van’s tax basis. You can still deduct business parking and tolls, and the business share of interest on a van loan. Here is an example with made-up miles. A driver logs 14,000 business miles from January through June and 16,000 from July through December:

• 14,000 miles at 72.5 cents is $10,150.
• 16,000 miles at 76 cents is $12,160.
• The 2026 deduction is $22,310.

A log with only a yearly total cannot be split that way, so date every entry.

Two rules decide which method you can use. If you own the van, you have to pick the standard rate in the van’s first year of business use, and a van with a section 179 deduction or accelerated depreciation cannot use it. The NEMT business taxes guide lays out these rules and the five-vehicle limit for fleet owners.

Which miles count decides the size of the deduction. Miles from one pickup to the next, loaded or empty, are deductible. If you have no office, the first business stop in your area is treated as your office. Your drive to that first pickup, and the drive home after the last drop-off, are commuting and not deductible. A home that qualifies as your principal place of business changes that, and the trips between home and a work stop can then count.

What should a driver’s mileage and trip log show?

A log that holds up shows the date, the destination, the business purpose and the miles of each business use, plus total miles for the year. For the van itself it also needs what the van and any improvements cost and the date you began using it for business. Publication 463 wants each entry written when the trip happens or soon after, and a weekly log is considered timely. Keep the records for 3 years after you file the return that claims the deduction.

Trip sheets are among the records the IRS lists as acceptable, so a dated list of your trips from the company covers the date and destination. The odometer start and end for each day cover the miles between pickups, and a free NEMT mileage log has lines for the odometer readings, the destination and the purpose. Save every receipt for parking, tolls and anything else you deduct.

Trip records in HealthRide

HealthRide keeps GPS-recorded miles and timestamps for each trip, and you can export the trip log as a CSV or PDF. A company that runs its contractors on HealthRide can hand each one a dated list of their trips and trip miles, which covers the date and destination part of a mileage log. See reports. The odometer reading at the start and end of the day still comes from the driver.