Self-Employment Tax Calculator
Calculate Schedule C self-employment taxes (15.3% on 92.35% net profit), Social Security cap offsets for W-2 wages, and 50% above-the-line tax deductions.
15.3% Self-Employment Tax & Deductions
IRS Self-Employment Tax Formula
Net SE Earnings = Net Profit × 92.35% | SE Tax = (Taxable SS × 12.4%) + (Net SE Earnings × 2.9%) | Above-the-Line Deduction = SE Tax × 50%- 92.35% Base Factor: The IRS allows you to deduct 7.65% from gross business profit before calculating SE tax, simulating the employer tax deduction.
- 15.3% SECA Rate: Combines 12.4% Social Security (up to $168,600 cap) and 2.9% Medicare.
- 50% Income Tax Deduction: Exactly half of your calculated SE tax is deducted on Schedule 1 of Form 1040, lowering your federal taxable income.
Step-by-Step Worked Example
Calculation Steps:
How to Use This Calculator
Assumptions & Limitations
- Assumes business profit is active earned income subject to SECA rather than passive rental revenue.
Frequently Asked Questions
How do existing W-2 wages affect self-employment tax?
Your W-2 wages count first toward the $168,600 Social Security cap. If you earn $120,000 at a W-2 job, only $48,600 of your freelance profit is subject to the 12.4% Social Security tax, though all freelance profit remains subject to 2.9% Medicare.
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