Do you always deduct one half of the Self Employment tax when you calculate it? It doesn't seem like it's optional? And why wouldn't you? Just making sure I understand

[KrisD · Accepted solution]

Yes, half is treated the same as a W2 employee, and half is subtracted from Adjusted Gross Income, similar to an employer deducting the portion of FICA they paid for their employees. 

"Compute self-employment tax on  Form 1040, Schedule SE.pdf . When figuring your adjusted gross income on Form 1040, you can deduct one-half of the self-employment tax. You calculate this deduction on Schedule SE (attach  Form 1040, Schedule 1.pdf ,  Additional Income and Adjustments to Income ). The  Social Security Administration  uses the information from Schedule SE to compute your benefits under the social security program."

https://www.irs.gov/taxtopics/tc554

[dale]

So last question, I think....The 50% is the tax I owe on my self employment.  Do I still have to pay Federal Income tax on that?  Is is SS and Medicare all I have to pay?  

[Zbucklyo]

You also have to pay federal and state income tax on your earnings from self-employment.

[dale]

OK, thank you!