If you are self-employed or a contractor, self-employment tax takes the place of FICA tax on a W-2 or pay stub. Generally, if you are an employee, your employer pays half of the Medicare and Social Security Tax that makes up FICA. When you are your own boss, you pay the full amount of those taxes based on your net income. The Social Security Administration then uses this information to figure your benefits.
You must complete a Schedule SE if:
- You have Self- Employment income of $400 or more.
- You have church employee (not clergy) income of $108.28 or more.
The maximum amount of income subject to social security tax is $147,000.
The program automatically generates this form when filing a Schedule C unless:
- you have Statutory Income listed on the W-2
- you indicate you are a member of the clergy (questions about your business on the Schedule C). OR
- you have $0 net income after making your entries.
Ministers and Members of Religious Orders
According to the SE Instructions, "In most cases, you must pay SE tax on salaries and other income for services you performed as a minister, a member of a religious order who has not taken a vow of poverty, or a Christian Science practitioner. But if you filed Form 4361 and received IRS approval, you will be exempt from paying SE tax on those net earnings.
If you were a U.S. Citizen or resident alien serving outside the United States as a minister or member of a religious order and you must pay SE tax, you can't reduce your net earnings by the foreign earned income exclusion or the foreign housing exclusion or deduction."
Program Entry
From the 'My Account' Screen, select
- Federal Section
- Other Taxes
- Self-Employment Tax
Please Note: If you have prepared a Schedule C or Schedule F within your account, we will automatically calculate the appropriate amount of self-employment tax based on the overall profit reported.
If you would like to view Line by Line Instructions on how to compete this form please Click Here.