Where do I enter my Self-Employment Tax Deduction?

If you earn self-employment income as a freelancer, independent contractor, sole proprietor, or farmer, you may need to pay self-employment tax. The good news is that you can generally deduct part of that tax on your federal income tax return.

Self-employment tax is the self-employed equivalent of the Social Security and Medicare taxes withheld from an employee's paycheck. When you work for an employer, these taxes are split between you and your employer. 

When you're self-employed, you're responsible for both portions.

The self-employment tax rate is 15.3%, which consists of:

In most cases, you'll owe self-employment tax if your net earnings from self-employment are more than $400.

Yes. While you're responsible for paying the full self-employment tax, you can generally deduct the portion that would normally be paid by an employer.

This deduction equals 50% of your self-employment tax and is claimed as an adjustment to income on your tax return. It can reduce your adjusted gross income (AGI), which may lower your overall income tax liability.

If your net self-employment earnings are more than $400 (excluding church employee income, if applicable), you'll generally need to file Schedule SE.

When you complete:

our software automatically calculates your self-employment tax, generates Schedule SE when required, and includes the self-employment tax deduction on your return.

The self-employment tax deduction reduces your taxable income for income tax purposes. However, it does not reduce the net earnings used to calculate your self-employment tax.

In other words, the deduction can help lower your income tax, but it does not lower the self-employment tax itself.

For more information, see: