Publication 334
taxmap/pubs/p334-003.htm#en_us_publink100025054Self-employment tax (SE tax) is a social security and Medicare
tax primarily for individuals who work for themselves. It is similar to the
social security and Medicare taxes withheld from the pay of most wage earners.
 | If you earned income as a statutory employee, you do not
pay SE tax on that income.
|
taxmap/pubs/p334-003.htm#en_us_publink100025056Social security benefits are available to self-employed persons
just as they are to wage earners. Your payments of SE tax contribute to your
coverage under the social security system. Social security coverage provides you
with retirement benefits, disability benefits, survivor benefits, and hospital
insurance (Medicare) benefits.
| By not reporting all of your self-employment income, you
could cause your social security benefits to be lower when you retire. |
taxmap/pubs/p334-003.htm#en_us_publink100025058You must be insured under the social security system before you
begin receiving social security benefits. You are insured if you have the
required number of credits (also called quarters of coverage), discussed next.
taxmap/pubs/p334-003.htm#en_us_publink100025059For 2010 and 2011, you received one credit, up to a maximum of
four credits, for each $1,120 of income subject to social security taxes.
Therefore, for 2010 or 2011, if you had income (self-employment and wages) of
$4,480 that was subject to social security taxes, you receive four credits
($4,480 ÷ $1,120).
For an explanation of the number of credits you must have to
be insured and the benefits available to you and your family under the social
security program, consult your nearest Social Security Administration (SSA)
office.
| Making false statements to get or to increase social security
benefits may subject you to penalties. |
taxmap/pubs/p334-003.htm#en_us_publink100025061Generally, the SSA will give you credit only for self-employment
income reported on a tax return filed within 3 years, 3 months, and 15 days
after the tax year you earned the income. If you file your tax return or report
a change in your self-employment income after this time limit, the SSA may
change its records, but only to remove or reduce the amount. The SSA will not
change its records to increase your self-employment income.
taxmap/pubs/p334-003.htm#en_us_publink100025062You must pay SE tax and file Schedule SE (Form 1040) if either
of the following applies.
- Your net earnings from self-employment (excluding church employee
income) were $400 or more.
- You had church employee income of $108.28 or more.
| The SE tax rules apply no matter how old you are and even
if you are already receiving social security or Medicare benefits. |
taxmap/pubs/p334-003.htm#en_us_publink100025064The SE tax rate on net earnings is 15.3% (12.4% social security
tax plus 2.9% Medicare tax).
taxmap/pubs/p334-003.htm#en_us_publink100025065Only the first $106,800 of your combined wages, tips, and net
earnings in 2010 is subject to any combination of the 12.4% social security part
of SE tax, social security tax, or railroad retirement (tier 1) tax.
All your combined wages, tips, and net earnings in 2010 are subject
to any combination of the 2.9% Medicare part of SE tax, social security tax, or
railroad retirement (tier 1) tax.
If your wages and tips are subject to either social security
or railroad retirement (tier 1) tax, or both, and total at least $106,800, do
not pay the 12.4% social security part of the SE tax on any of your net
earnings. However, you must pay the 2.9% Medicare part of the SE tax on all your
net earnings.
 | Deduct one-half of your SE tax as an adjustment to income
on line 27 of Form 1040.
|
taxmap/pubs/p334-003.htm#en_us_publink100025067For information on methods of calculating SE tax, see Chapter
10,
Self-Employment Tax.
taxmap/pubs/p334-003.htm#id2010_f11063p02
Table 1-2. Which Forms Must I File?
| IF you are liable for: | THEN use Form: | DUE by:1 |
|---|
| Income tax | 1040 and Schedule C or C-EZ2 | 15th day of 4th month after end of
tax year.
|
| Self-employment tax | Schedule SE | File with Form 1040. |
| Estimated tax | 1040-ES | 15th day of 4th, 6th, and 9th months of tax year, and 15th
day of 1st month after the end of tax year. |
| Social security and Medicare taxes and income tax withholding | 941 or 944 | April 30, July 31, October 31, and January 313.
|
| | | See Publication 15. |
| Providing information on social security and Medicare taxes
and income tax withholding | W-2 (to employee)
W-2 and W-3 (to the Social Security Administration)
| January 313.
Last day of February (March 31 if filing electronically)3.
|
| Federal unemployment (FUTA) tax | 940 | January 313.
|
| | | April 30, July 31, October 31, and January 31, but only
if the liability for unpaid tax is more than $500. |
| Filing information returns for payments to nonemployees
and transactions with other persons | See
Information Returns | Forms 1099–to the recipient by January 31 and to the
IRS by February 28 (March 31 if filing electronically). |
| | | Other forms—see the General Instructions for Certain
Information Returns (Forms 1097, 1098, 1099, 3921, 3922, 5498, and W-2G). |
| Excise tax | See
Excise Taxes | See the instructions to the forms. |
| 1
If a due date falls on a Saturday, Sunday, or legal holiday, file by the next
day that is not a Saturday, Sunday, or legal holiday. For more information, see
Publication 509, Tax Calendars.
|
| 2 File a separate schedule for each business.
|
| 3
See the form instructions if you go out of business, change the form of your
business, or stop paying wages.
|
| |
| |
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