Are these included in the estimated income tax I pay every quarter? Or do I pay this tax separately?
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Self-employment tax is the equivalent of Social Security and Medicare taxes for self-employment income. The self-employment tax will be included in the total tax on your tax return. Your estimated tax payments will be applied to the total tax, which includes income tax and self-employment tax. You do not pay the self-employment tax separately.
Yes. Thats why you pay estimated taxes.
You will pay Self Employment tax (Scheduled SE) on a Net Profit of $400 or more on Schedule C in addition to regular income tax on it. You pay 15.3% SE tax on 92.35% of your Net Profit (If it is 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.
Turbo Tax guide to Estimated taxes
A Guide to Paying Quarterly Taxes - TurboTax Tax Tips & Videos
Self-employment tax is the equivalent of Social Security and Medicare taxes for self-employment income. The self-employment tax will be included in the total tax on your tax return. Your estimated tax payments will be applied to the total tax, which includes income tax and self-employment tax. You do not pay the self-employment tax separately.
I think I get it. So when I'm making my quarterly estimated tax payments, I just send in one payment. And when I file my 2024 return it's also just one payment, some of which is my income tax and some social security?
Yes, that's right.
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