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 based mostly on the person’s internet earnings, which is their whole earnings minus allowable enterprise bills. The self-employment tax fee 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 necessary for self-employed people to calculate their taxes appropriately with a view to keep away from penalties. Self-employment taxes may 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 yr. Self-employed people could make their tax funds on-line, by mail, or by telephone.
