Income that has already had SS and Medicare taxes taken out (if you have a combination of self-employment income and wages earned from an employer) Dividends from stocks and interest on bonds held as an individual Interest earned from personal loans Money earned from renting real estate (unless that is your business) Income from a limited partnership

For example, if your self employment income is $50,000, you will need to pay SS taxes of $6200 (12. 4% of $50,000). However, Social Security has a maximum taxable wage of $127,200. If your income is over that amount, you will only pay SS tax on the first $127,200. For instance, if your self-employment income is $150,000, you will only pay $15,772. 80 (12. 4% of $127,200) in SS taxes. The remaining $22,800 of your income above the $127,200 threshold will not be subject to SS taxes.

For instance, if your self-employment income is $50,000, you will pay Medicare taxes of $1450 (2. 9% of $50,000).

The threshold for the additional Medicare tax varies based on how you file. It is $200,000 if you file as single, head of household (with qualified person), or qualifying widow(er) with dependent child. It is $125,000 if you file as married filing separate. It is $250,000 if you file as married filing jointly. For instance, if you file as single and your self-employment income is $250,000, you must pay 2. 9% in Medicare taxes on the first $200,000 of it, and 3. 8% (2. 9% + 0. 9%) on the remaining $50,000. This means that your Medicare taxes would total $7700 ($5800 + $1900). If you earn wages over $200,000 from an employer, you must pay the full amount of the additional Medicare tax yourself. It is not split 50/50.

If you earned $45,000 from wages and $35,000 from self-employment, your employer will take out Social Security taxes on your wages. You will need to pay the taxes on your self-employment income. All of your wages and income will be subject to SS taxes because they total less than $127,200. If you have $100,000 from wages and $50,000 from self-employment income, your employer will take out Social Security taxes on your wages. However, only the first $27,200 of your self-employment income will be subject to SECA SS taxes. This is because your wages ($100,000) plus a portion of your self-employment income ($27,200) total the $127,200 threshold on SS taxes. The remaining $22,800 of your self-employment income will not be subject to SS taxes.

Certain recognized religious groups opposed to Social Security and Medicare can apply for the exemption by filling out IRS Form 4029. Receiving this exemption also means you waive any benefits from these programs. If you were ever eligible to receive these benefits (regardless of whether or not you actually received any), you cannot apply for the exemption. Non-resident aliens must pay SS taxes unless they are students or educational professions working in the US on a temporary basis, or unless they are working for a foreign government. Students working for the same school they are enrolled at do not have to pay the FICA tax if their job is one they can only have because they are a student. In addition, this exemption only applies to wages earned from the school, not to any additional jobs.

If you use tax-preparation software to complete your taxes, these forms should be included. The software will guide you through filling out the forms. If you are self-employed in agriculture, file Schedule F (Profit or Loss from Farming) instead of Schedule C. File these forms even if you don’t owe any income tax, so that you can pay your Social Security taxes. This increases your eligibility to receive SS benefits later.

Your net earnings from self-employment are reduced by half the amount of Social Security tax you owe. This replaces the portion that your employer would have paid, which is not treated as taxable income. You can also deduct half of your Social Security tax on Form 1040. However, this deduction must be taken from your gross income, it cannot be itemized, and it cannot be on Schedule C.