Self-Employment Tax
Tax on Self-Employment Earnings
Individuals operating a trade or business as sole proprietors or partners generally pay self-employment tax on qualifying earnings. This tax helps fund Social Security and Medicare programs.
- Applies to qualifying self-employment earnings.
- Generally covers Social Security and Medicare taxes.
- Different from regular income tax.
- Certain deductions may be available.
Note
Self-employment tax is calculated separately from regular federal income tax.
Summary
Self-employed individuals often have additional tax obligations beyond ordinary income tax.