A 1099 accountant in Alabama is taxed at the state’s 5% top rate on almost all profit, on top of federal income tax and the full 15.3% self-employment tax. Alabama’s 5% top rate arrives at just $3,000 of taxable income, so nearly all contract profit is taxed at the maximum, and every dollar of licensing, software and CPE you document on Schedule C cuts all three bills at once.