Definition:
If you work for yourself, made more than $400 and someone else is not paying your social security and Medicare tax, you owe the government self-employment tax. These rates can fluctuate, but are around 13.3%. You will want to check with IRS to determine the current rate.
The IRS recommends those who are self-employed and think they will owe taxes, to pay estimated taxes quarterly throughout the year.
To pay self-employment tax, you file using the Form 1040, Schedule SE.
Alternate Spellings: SE Tax
Examples: Because I own and run a profitable cleaning business out of my home, I will be required to pay self-employment tax.
If you work for yourself, made more than $400 and someone else is not paying your social security and Medicare tax, you owe the government self-employment tax. These rates can fluctuate, but are around 13.3%. You will want to check with IRS to determine the current rate.
The IRS recommends those who are self-employed and think they will owe taxes, to pay estimated taxes quarterly throughout the year.
To pay self-employment tax, you file using the Form 1040, Schedule SE.
Alternate Spellings: SE Tax
Examples: Because I own and run a profitable cleaning business out of my home, I will be required to pay self-employment tax.
Source...