Calculating self-employment tax is the method of figuring out the quantity of taxes that self-employed people owe to the federal government. This tax is calculated primarily based on the person’s web earnings, which is their whole earnings minus allowable enterprise bills. The self-employment tax price is 15.3%, which is split into two components: 12.4% for social safety (old-age, survivors, and incapacity insurance coverage) and a couple of.9% for Medicare (hospital insurance coverage).
It is crucial for self-employed people to calculate their taxes appropriately as a way to keep away from penalties. Self-employment taxes might be paid quarterly or yearly. Quarterly funds are due on April 15, June 15, September 15, and January 15. Annual funds are due on April 15 of the next 12 months. Self-employed people could make their tax funds on-line, by mail, or by cellphone.
