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What is the Self-Employment Tax Rate?


Question: What is the Self-Employment Tax Rate?
If you are self-employed, you must pay SECA tax (Social Security and Medicare tax) on your income from self-employment. This income is calculated on Schedule C; Schedule C income or loss is then used to calculate self-employment tax on Schedule SE.
Answer: The Social Security tax rate for 2013 is 15.3 percent on self-employment income. The rate consists of two parts: 12.4% for social security (old-age, survivors, and disability insurance) and 2.9% for Medicare (hospital insurance). The Social Security portion is taxed up to the Social Security maximum for each year. If your net earnings exceed the maximum, you continue to pay only the Medicare portion of the self-employment tax. The Social Security annual maximum applies to all income, including self-employment income and wages or salaries earned from employment.

Self-Employment Tax on 2011 Income
The 2010 Tax Relief Act reduced the self-employment tax by 2% for self-employment income earned in calendar year 2011. The self-employment tax rate for self-employment income earned in calendar year 2011 is 13.3% (10.4% for Social Security and 2.9% for Medicare). For self-employment income earned in 2010, the self-employment tax rate is 15.3%.

More information about self-employment taxes, including how they are calculated and how self-employment taxes affect your total income.

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