Self-Employment Tax

For questions, email Chuck Plake, E.A. at Plake Tax Service cplake@plakenet.com.

This section discusses self-employment tax. The list of items below should not be construed as all-inclusive. Other information may be appropriate for your specific type of business.

What is Self-Employment Tax?
How to Pay Self-Employment Tax
Estimated Taxes
Who Must Pay Self-Employment Tax?
Are You Self-Employed?
Earned Income Tax Credit

What is Self-Employment Tax?

Self-employment tax (SE tax) is a social security and Medicare tax primarily for individuals who work for themselves. It is similar to the social security and Medicare taxes withheld from the pay of most wage earners.

You figure SE tax yourself using Schedule SE (Form 1040). Social security and Medicare taxes of most wage earners are figured by their employers. Also you can deduct half of your SE tax in figuring your adjusted gross income. Wage earners cannot deduct social security and Medicare taxes.

SE tax rate. The self-employment tax rate is 15.3%. The rate consists of two parts: 12.4% for social security (old-age, survivors, and disability insurance) and 2.9% for Medicare (hospital insurance).