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Lev, Tax Advisor
Category: Tax
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Experience:  Taxes, Immigration, Labor Relations
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Do I need to pay the selfemployment tax even though the Max

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Do I need to pay the selfemployment tax even though the Max SS was already withheld (4624) with the other taxes?
Hi and welcome to Just Answer!
Self employment taxes have two parts - Social Security (OASDI) taxes and Medicare's Hospital Insurance (HI) taxes.
For 2012, the maximum taxable earnings amount for Social Security (OASDI) taxes is $110,100 or $4624 - so you will not pay that part.
There is no limitation on taxable earnings for Medicare's Hospital Insurance (HI) taxes - thus - you will pay 2.9% of your net self-employment income.

You may reduce self-employment taxes for this and following years if you set S-corporation for your business activities.
In this case - you will be paid reasonable wages - subject of FICA taxes (equivalent of self-employment taxes) - and the remaining income will be passed to you of K-1 and will not be subject of self-employment taxes.

Let me know if you need any help.
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