IRS

Form Schedule SE

Rev. 2024

Self-Employment Tax

Calculates Social Security (12.4%) and Medicare (2.9%) taxes for self-employed individuals.

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Plain English

Schedule SE calculates the self-employment tax you owe as a business owner. Unlike employees who split Social Security and Medicare taxes with their employer, self-employed people pay both halves — but get to deduct half of it on their tax return.

Quick Facts

Who: Self-employed individuals whose net earnings from self-employment exceed $400 in a tax year (via Schedule C, Schedule F, or partnership income).

What: The tax form that calculates Social Security (12.4%) and Medicare (2.9%) taxes on self-employment income, plus additional Medicare tax (0.9%) for high earners.

When: Filed annually with Form 1040 — along with Schedule C or other business income schedules.

Where: Attached to your tax return. The calculated SE tax amount is entered on Schedule 2 of Form 1040.

Why: Self-employed individuals don't have an employer withholding and matching FICA taxes. Schedule SE ensures you pay into Social Security and Medicare — which you need to qualify for benefits later.

How: Enter net profit from Schedule C (or Schedule F). Multiply by 0.9235. Calculate SE tax (15.3% up to SS wage base, then 2.9%). The deductible portion (50% of SE tax) goes on Schedule 1.

Common Risks & Mistakes

•Not filing when net earnings exceed $400 — you owe SE tax even if no income tax is due
•Forgetting the 0.9235 multiplier — SE tax is calculated on 92.35% of net profit, not 100%
•Missing the additional Medicare tax (0.9%) if income exceeds $200,000 (single) or $250,000 (MFJ)
•Confusing SE tax with income tax — SE税 is in addition to income tax, not a replacement
•Not claiming the deductible portion (50% of SE税) on Schedule 1 — this reduces AGI

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