Most often, self-employment tax is paid because you've entered self-employment income, either as cash or from a 1099-NEC, 1099-MISC or 1099-K form. If your self-employment income is $400 or more (after deducting expenses), you'll have to pay self-employment tax.
Note: Self-employment tax and income tax are two separate taxes. You can owe self-employment tax even if you don't need to pay income tax.
Other less common reasons to pay self-employment tax
- You have clergy income
- Your income as a church employee exceeds $108.28
- You received income from a partnership (Schedule K-1)
If you have a 1099 NEC or 1099-MISC form:
This could be self-employment income and you would pay taxes on it, based on the conditions described.
Examples of income that are not from self-employment include prize money, lawsuit settlement, research study, and others. You don’t need to pay self-employment tax on these types of income. We’ll figure this for you when you enter your 1099s.
If your 1099-NEC or 1099-MISC is incorrectly reporting your income, you should contact the payer and have them issue a corrected 1099.