Are you going to use a tax program like Turbo Tax? The tax programs figure it all automatically. Did you use Turbo Tax last year?
For your tax return You will need to use the Online Self Employed version or any Desktop program but the Desktop Home & Business version will have the most help.
And yes for keeping track of your income and expenses you should be using a program like Quicken or QuickBooks. There is a QuickBooks Self Employment bundle you can check out which includes one Turbo Tax Online Self Employed return....
http://quickbooks.intuit.com/self-employed
You can buy the Desktop CD/Download program now here,
https://turbotax.intuit.com/personal-taxes/cd-download/
And the Online versions will open in December here, https://turbotax.intuit.com/personal-taxes/online/
You enter you business income. Then you enter all your expenses. That gives you the Net Profit or Loss on Schedule C.
Self Employment tax (Scheduled SE) is automatically generated if a person has $400 or more of net profit from self-employment. You pay 15.3% SE tax on 92.35% of your Net Profit greater than $400. The 15.3% self employed SE Tax is to pay both the employer part and employee part of Social Security and Medicare. So you get social security credit for it when you retire. You do get to take off the 50% ER portion of the SE tax as an adjustment on 1040 Schedule 1 line 27. The SE tax is already included in your tax due or reduced your refund. It is on the 1040 Schedule 4 line 57 which goes to 1040 line 14. The SE tax is in addition to your regular income tax on the net profit.
