What is Schedule SE?
IRS form used to calculate self-employment tax (Social Security and Medicare) on net self-employment income.
Definition
Schedule SE (Self-Employment Tax) is used to calculate the self-employment tax owed on net earnings from self-employment. Self-employment tax is 15.3% (12.4% for Social Security on the first $168,600 in 2024, plus 2.9% Medicare on all earnings). You can deduct half of your self-employment tax on Form 1040 as an adjustment to income.
Who Needs to Know This?
Self-employed individuals with net self-employment earnings of $400 or more, including sole proprietors, independent contractors, freelancers, and partners in partnerships.
Key Deadline
Filed with annual tax return
Potential Penalties
Penalties for underpayment of estimated taxes
Related Forms
Common Mistakes to Avoid
- 1Forgetting to deduct the employer-equivalent portion (7.65%)
- 2Not making quarterly estimated payments
- 3Confusing self-employment tax with income tax
- 4Not understanding the Social Security wage base limit
Related Terms
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