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/ June 13, 2018

How Self-Employment Tax Can Affect Your Tax Return

When you work for a company, your employer pays a portion of your Social Security and Medicare taxes. However, when you are self-employed, you are responsible for paying the “employer” portion of those taxes. Self-employment tax (SE tax) is used to collect those Social Security and Medicare taxes from self-employed individuals.

Here’s what you need to know:

  • If you earn more than $400 in a year from self-employment activities, you are required to pay SE tax.
  • Most church employees are required to pay self-employment tax. Any church employee who earns income of at least $108.28 must pay SE tax.
  • The “employer-equivalent” portion of your SE tax can be deducted when figuring your adjusted gross income. This decreases your income tax but not your self-employment tax.
  • You can pay your SE tax along with your income tax via estimated tax payments.

If you have questions or concerns regarding self-employment tax, be sure to ask! At Taxation Solutions, Inc., our team of professionals has more than 40 years of experience providing all types of tax help. We are standing by to help take the stress and hassle out of tax problems large and small, so contact us today.

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Taxation Solutions, Inc.
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Serving Memphis TN; Arlington TN; Cordova TN; Eads TN; Germantown TN; Hernando TN; Marion TN; Millington TN; Southaven TN; Tunica Resorts TN Since 2008
1661 International Dr Suite #400 Memphis, TN 38120
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  • Tax Resolution Services
  • IRS Back Taxes
  • Business Tax Problems
  • IRS Audits
  • Tax Attorneys
  • IRS Tax Settlement
  • IRS Tax Penalties
  • Tax Relief for Truckers
  • Stop Wage Garnishments
  • Offers in Compromise
  • Innocent Spouse Relief