Self Employment Tax Help
Below is self employment tax help, tips and laws as well as self employment tax rate. Not everyone who is self employed need to file and pay self employment tax. If the self employment income is below $400, the taxpayer does not need to file an income tax return reporting the self employment income.
Self employment tax, who pays?
If you are self employed then you are subject to self employment tax on your earnings. You must file a form 1040 Schedule SE called the Self Employment Tax with your form 1040 if:
I am already receiving social security and Medicare benefits, do I have to pay self employment tax?
The self employment tax rules apply no matter how old you are even if you are already receiving social security or Medicare benefits.
What is the self employment tax rate?
The self employment tax rate is 15.3% in 2007 and is comprised of both:
the Social Security tax (12.4% for retirement , survivor and disability insurance) and
the Medicare tax (2.9% for hospital insurance).
The social security tax is 12.4% on earnings up to $94,200 in 2007. For income over $94,200 there is no additional social security tax. The Medicare tax remains at 2.9% for all your self employment income. The self employment tax calculated on Schedule SE is entered on line 58 of Form 1040. One half of the self employment tax is deductible as an adjustment to your income and is entered on line 27 of the form 1040.