|
Q.What is self-employment tax?
A.Self employment tax is the Social Security and Medicare tax for self-employed individuals. You are considered self-employed (and subject to self-employment tax) if you carry on a trade or business as a sole proprietor, an independent contractor, a member of a limited liability company that has elected partnership taxation, or are otherwise in business for yourself. You do not have to carry on regular full-time business activities to be self-employed. Part-time work, including work you do on the side in addition to your regular job, may also be self-employment.
You are required to pay self-employment tax if you have net earnings of $400 or more from your business or trade. Self-employment tax is paid by making quarterly estimated tax payments on Form 1040-ES (Estimated Tax for Individuals).
IRS Circular 230 Disclosure: As required by U.S. Treasury Regulations, you are hereby advised that any written tax advice contained on this web site is not written or intended to be used (and cannot be used) by any taxpayer for the purpose of avoiding penalties that may be imposed on a taxpayer under the U.S. Internal Revenue Service.
|
