Self Employment Tax Guide
Below is a self employment tax guide for any taxpayers who are in business for themselves. Self employment tax is sometimes called just SE tax. Taxpayers use the Schedule SE to calculate the self employment tax obligations and the Schedule SE is attached to the tax form 1040.
Differences between Schedule C and Schedule SE
Sometimes, taxpayers are confused between the use of Schedule C and the use of Schedule SE. Schedule C is the Profit and Loss from Business whereas Schedule SE is the Self Employment Tax. The taxpayer has to fill out Schedule C before he or she fills out Schedule SE because the net profit or loss from Schedule C is included in Schedule SE.
What is self employment tax?
Self employment tax is the tax that self employed individuals must pay the IRS. However, not every self employed individual has to pay the self employment tax. If the net earnings from self employment is below $400, then the self employed individual does not need to pay the self employment tax.