Schedule SE calculates the amount of self-employment tax owed by a business owner, based on the profit (loss) of the owner's business (sole proprietorship or single-member limited liability company (LLC)) during the year. The self-employment taxes owed based on Schedule SE are for Social Security and Medicare.
The Schedule SE calculation is entered on IRS Form 1040 in two places:
- Line 27, which reduces Adjusted Gross Income by half of the Self-employment tax amount
- Line 57, to include the total self-employment tax owed, in addition to personal income taxes.
Read more about filing Schedule SE for 2011