Can you tell me about the Self-Employment tax (SECA)
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Hello Dawn,
Self-employment tax is a 15.3% additional tax you pay on your net profit from your business. When you work for an employer they pay into social security and Medicare and you pay into social security and Medicare. When you are self employed you are paying both the employer and employee share of the social security and Medicare.
Here is link that talks about self-employment tax in more detail
https://turbotax.intuit.com/tax-tips/self-employment-taxes/the-self-employment-tax/L8xXjolB4
Hi @DawnMShafer
Here is some information related to the SECA
Self-employment tax (SE tax) is the Social Security and Medicare tax paid by self-employed individuals. It is similar to FICA which is the Social Security and Medicare taxes withheld from an employee’s paycheck.
When you’re self-employed, you are paid the full amount you earn. Nothing is deducted from your check for Social Security and Medicare taxes. Instead, you make estimated tax payments during the year to pay your SE tax and your income tax. If you don’t make estimated tax payments, then you pay these taxes when you file your return.
If you’re self-employed, you can claim a federal deduction for half the SE tax you pay, which can help lower your taxes.
The SE tax rate is 15.3% with 12.4% for Social Security and 2.9% for Medicare.
We report your SE tax on Schedule SE and also calculate the deduction that goes along with it.
Hope this information helps!
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