dmertz
Level 15

Retirement tax questions

Sorry, I wrote the formula wrong.  I should have written 1 - 1 / (1 + BaseRate) or BaseRate / (1 + BaseRate).  For a 25% base rate the self-employed rate is 25% / (1 + 25%) = 20%.  I've corrected that.  For a 20% base rate contributed on behalf of the W-2 employee, the self-employed rate must be 20% /  (1 +20%) = 16.6667%.  The self-employee rate for each whole percentage point increment of the base rate is listed in Rate Table for Self-Employed in Chapter 6 of IRS Pub 560.