What is the self-employment tax rate for 1099 employees?
Self-employment Tax The self-employment tax is similar to the social security tax and Medicare tax for employees. The self-employment tax is calculated on Schedule SE, Self-Employment Tax. The self-employment tax is paid on self-employment profit. • The self-employment tax rate is 15.3 percent of net earnings from self- employment. • Taxpayers pay self-employment tax on 92.35 percent of their self-employment profit up to net earnings of $97,500. The self-employment tax increases the total tax on Form 1040. One-half of the self-employment tax decreases the income that is subject to income tax Sources: http://209.85.175.104/search?q=cache:EHn6H3F_n0sJ:www.irs.gov/pub/irs-utl/mod_14_-_tax_tutorial_070108.
