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