Yes. The self-employment tax rate is 15.3%. The rate consists of two parts: 12.4% for social security and 2.9% for Medicare. However, he will get a credit of half his self-employment tax, which represents the employer-equivalent portion of his self-employment tax.
For tax purposes, self-employment income includes any part-time businesses or "side work" performed in which you are in business for yourself, rather than another person. You are also considered self-employed if you engage in business-like activities where you intend to make a profit.
If you do not think he is considered self-employed, you can have his 1099-NEC's flow to Other Income. It is important to note that if it is considered Other Income, he will not be able to deduct any expenses that relate to his 1099-NEC income.
If you want his 1099-NEC's flow to Other Income (and not be classified as self-employed), please follow the instructions below:
- Open the tax return.
- Search for 1099-NEC with the magnifying glass tool at the top of the page.
- Click on the Jump to 1099-NEC link at the top of the search results.
- Click Edit next to your 1099-NEC.
- Continue past the data entered.
- On the page Guess what? You can deduct expenses for the example work, answer No, I don't have expenses related to this income.
- The amount from your 1099-NEC will flow to Other Income.
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