Calculate your SECA tax, deductible half, and quarterly set-aside
The self-employment tax rate is 15.3%, which consists of 12.4% for Social Security and 2.9% for Medicare. An additional 0.9% Medicare tax applies to income above $200,000 (single) or $250,000 (married filing jointly).
The IRS multiplies your net profit by 92.35% to account for the employer portion of the tax that would normally be deducted. This prevents the self-employed from paying tax on the hypothetical employer contribution.
The Social Security wage base for 2026 is $184,500. Income above this amount is not subject to the 12.4% Social Security tax, but it is still subject to Medicare tax.
Yes. You can deduct 50% of your self-employment tax as an above-the-line deduction on your Form 1040. This reduces your adjusted gross income (AGI).
If you expect to owe $1,000 or more in taxes for the year, the IRS requires you to make quarterly estimated tax payments. The four due dates are April 15, June 15, September 15, and January 15.