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Understanding Self-Employment Tax (What is it and Who Must Pay it)

December 2nd, 2016

Posted in Business Law,IRS & Tax Information

If you are a Florida small business owner, independent contractor, or otherwise self-employed, it’s important to note that you may be liable for self-employment taxes.  Generally, the term self-employment tax refers to the Social Security and Medicare taxes for taxpayers who are self-employed.  Self-employed individual should calculate and report your self-employment tax on Schedule SE of their form 1040.

Typically, any Florida resident with net earnings over $400 who is self-employed will be liable for self-employment tax. Most taxpayers will be able to deduct the employer-equivalent portion of their self-employment tax from their adjusted gross income.  Nevertheless, the self-employment tax rules generally apply no matter your age and whether or not you are already receiving Social Security or Medicare.

As always, you should consider contacting a qualified Florida tax attorney to assist you if you have any questions.  For more information, see https://www.irs.gov/businesses/small-businesses-self-employed/self-employment-tax-social-security-and-medicare-taxes

 

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