Self-employment tax refers back to the taxes paid by self-employed people to cowl Social Safety and Medicare. These taxes are usually paid quarterly, and the quantity owed is calculated based mostly on the person’s internet revenue. Self-employment tax is essential as a result of it helps to make sure that self-employed people have entry to the identical Social Safety and Medicare advantages as conventional workers.
To calculate self-employment tax, you have to to first decide your internet revenue. That is your whole revenue minus any enterprise bills. After you have your internet revenue, you have to to multiply it by the self-employment tax price. The self-employment tax price is 15.3%, which is split into two components: 12.4% for Social Safety and a couple of.9% for Medicare.
