Taxes for AI trainers
US federal rules for tax year 2026. General information, not tax advice: your state, your other income and your situation change the answer.
AI training platforms pay you as an independent contractor. That makes your pay self-employment income: nothing is withheld, and you owe both income tax and self-employment tax on what you earn after expenses.
The short version
- Set aside 25-30% of every payment until you know your real rate. That covers self-employment tax plus income tax for most people in the 12-22% brackets.
- Pay quarterly if you expect to owe $1,000 or more for the year. The next federal deadline is January 15, 2027.
- Report all of it, with or without a 1099.
Self-employment tax: the 15.3% people forget
On top of income tax, contractors pay self-employment tax: 12.4% Social Security plus 2.9% Medicare, 15.3% in total, on 92.35% of net earnings. The Social Security part stops at the 2026 wage base of $184,500. An employer would normally pay half of this; as a contractor you pay both halves, then deduct half of it on your return.
| You net this year | Self-employment tax (approx.) |
|---|---|
| $10,000 | $1,413 |
| $30,000 | $4,239 |
| $60,000 | $8,478 |
Net earnings × 92.35% × 15.3%. Before income tax. Source: IRS, Self-employment tax
1099s changed for 2026
Starting with payments made on or after January 1, 2026, a platform only has to send you a Form 1099-NEC if it paid you $2,000 or more in the year, up from $600. The threshold rises with inflation from 2027. If you earned $1,500 on one platform you may get no form at all, but the income is still taxable and still goes on your return.
Source: One Big Beautiful Bill Act §70433; OnPay summary of the threshold change
Quarterly estimated payments
If you expect to owe at least $1,000 when you file, the IRS expects payments during the year. For 2026 the dates are April 15, June 15, September 15 and January 15, 2027. You avoid an underpayment penalty if you pay at least 90% of this year's tax, or 100% of last year's (110% if your adjusted gross income was over $150,000). You can pay online at IRS Direct Pay.
Source: IRS, Estimated taxes
Deductions people miss
- Equipment used for the work: a share of a laptop, monitor or headset matching how much you use it for AI work.
- Internet and phone, the business-use share.
- Home office, if a space is used regularly and only for the work (simplified method: $5 per square foot, up to 300 square feet).
- Software and subscriptions you need for projects.
- Payout fees and currency conversion costs.
Source: IRS, Home office deduction
Tools that do this for you
Contractors with income from several platforms often use software that tracks write-offs and estimates quarterly payments:
Keeper →
Finds write-offs in your bank and card transactions and files your return, built for 1099 contractors.
Best for: US contractors who want deductions found for them
FlyFin →
AI expense tracking plus CPA-reviewed filing for freelancers and gig workers.
Best for: US contractors who want a CPA to sign off
We may earn a fee if you sign up through these links. It doesn't change the price you pay.
Keep the money separate
A separate account for AI-work income makes the set-aside automatic and your records clean at tax time: