The self-employment tax rate is 15.3%. This tax applies to individuals who work for themselves and covers Social Security and Medicare taxes.
Here's a simplified breakdown of how to calculate self-employment tax:
Determine your net earnings:Calculate your self-employment net earnings by subtracting your business expenses from your gross income (use Schedule C).
Calculate the taxable base:Multiply your net earnings by 92.35% (0.9235).
Calculate the self-employment tax:Multiply the result from step 2 by the self-employment tax rate (15.3% or 0.153). This gives you the total self-employment tax amount.
Let's say your net earnings from self-employment are $50,000:
Taxable base:$50,000 * 0.9235 = $46,175
Self-employment tax:$46,175 * 0.153 = $7,064.78.
Therefore, your estimated self-employment tax would be $7,064.78.
Important Notes:
Social Security Wage Base:The Social Security portion of the self-employment tax (12.4%) has a wage base limit, which is $176,100 for 2025. If your net earnings exceed this amount, you'll stop paying the 12.4% Social Security tax on the excess, but you'll still pay the 2.9% Medicare tax on all your earnings.
Deduction for One-Half of Self-Employment Tax:You can deduct half of your self-employment tax when calculating your adjusted gross income (AGI), reducing your income tax liability.
For a MORE PRECISE CALCULATION, especially if your earnings are near or exceed the Social Security wage base, consultIRS Schedule SE.
2025-2026 Quarterly Estimated Tax Payment Due Dates:
1st Quarter:January 1 – March 31, 2025 -Due Date: April 15, 2025.
2nd Quarter:April 1 – May 31, 2025 -Due Date: June 16, 2025.
3rd Quarter:June 1 – August 31, 2Dealership5 -Due Date: September 15, 2025.
4th Quarter:September 1 – December 31, 2025 -Due Date: January 15, 2026. Y
You may estimate your overall Married Family Joint Taxes using TurboTax Personal Tax Calculator & Tools. Tax Calculator 2024 , or any other Tax Calculator available.
Lastly, the above is intended to give you a general idea of how to approach your tax situation and you are STRONGLY ENCOURAGED to consult a Tax Professional about the specific circumstances of your tax situation to obtain the Best Possible Results when filing your Tax Returns.
Kind Regards, Franklin TurboTax Expert
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