Self Employment Tax Calculator
Calculate self-employment tax including Social Security and Medicare taxes for freelancers, contractors, and business owners. Estimate quarterly tax payments and understand your tax obligations.
How to Use the Self Employment Tax Calculator
- Enter Net Self-Employment Income: Input your total self-employment earnings after business expenses
- Review Tax Breakdown: See Social Security, Medicare, and additional Medicare taxes calculated
- Check Quarterly Payments: View estimated quarterly payment amounts if applicable
- Note Deduction: The calculator shows your deductible portion (50% of SE tax)
- Plan Accordingly: Use the results to budget for quarterly estimated tax payments
Frequently Asked Questions
When do I need to pay quarterly estimated taxes?
You should make quarterly payments if you expect to owe $1,000 or more in taxes for the year. Quarterly due dates are April 15, June 15, September 15, and January 15 of the following year.
Can I deduct business expenses to reduce self-employment tax?
Yes! Legitimate business expenses reduce your net profit, which directly reduces your self-employment tax. Keep detailed records of all business-related expenses.
What's the difference between income tax and self-employment tax?
Self-employment tax funds Social Security and Medicare, while income tax funds general government operations. You pay both on your self-employment earnings, but they're calculated separately.
How do I calculate net earnings from self-employment?
Net earnings = Gross income - Business expenses. Then multiply by 92.35% (0.9235) to get the amount subject to self-employment tax. This accounts for the employer portion of the tax.
What happens if I don't pay self-employment tax?
Failing to pay self-employment tax can result in penalties, interest charges, and reduced Social Security benefits in retirement. It's important to stay current with these obligations.
Understanding Self-Employment Tax
What is Self-Employment Tax?
Self-employment tax consists of Social Security and Medicare taxes for individuals who work for themselves. It's equivalent to the Social Security and Medicare taxes withheld from the pay of most wage earners.
- • Social Security: 12.4% on earnings up to $160,200 (2024)
- • Medicare: 2.9% on all earnings
- • Additional Medicare: 0.9% on earnings over threshold
- • Total Rate: 15.3% on most earnings
Who Must Pay SE Tax?
You must pay self-employment tax if you have net earnings from self-employment of $400 or more in a tax year. This includes:
- • Freelancers: Independent contractors and consultants
- • Business Owners: Sole proprietors and partners
- • Side Hustlers: Even if you have a day job
- • Gig Workers: Uber, DoorDash, freelance writers, etc.
Self-Employment Tax Tips
• Deduction Benefit: You can deduct 50% of your SE tax as a business expense
• Quarterly Payments: Make estimated payments if you expect to owe $1,000+ in taxes
• Business Expenses: Maximize deductible expenses to reduce net earnings
• Retirement Contributions: SEP-IRA and Solo 401(k) can reduce taxable income
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