Ask a Social Security Question, Get an Answer ASAP!
Do you need to know how much in self-employment tax you will owe? What is the maximum Social Security takes for tax? Individuals that are self-employed and receive a 1099 may face many questions regarding self-employment taxes. Uncertainties will lead to confusion and questions and knowing Experts are readily available online to answer your questions will ease your worries. Read below where Experts have answered Social Security self-employment tax questions.
This is a U.S. tax that is typically set at 15.30%. This is close to the equivalent of what the usual employer and employee would pay under the Federal Insurance Contribution Act (FICA) tax. This FICA tax is a combination of two parts: 12.4% for Social Security and 2.9% for Medicare. There are limits in place that the self-employment tax applies to. For the Social Security portion, this only applies to the first $118,500 of income (the amount may vary from year to year). There is no limitation for the Medicare portion; it will be 2.9% on any amount. The portion that an individual pays in the self-employment tax that is normally paid by an employer is allowed as a deduction against the income. If self-employment tax liability exceeds $1,000 then the individual must pay the estimated taxes quarterly using form 1040-ES.
This tax is paid on the net income minus expenses.
The Social Security portion does have a limit of $118,500 of income that will be taxed. There is no limit on the income to be taxed for Medicare.
A person can figure out tax by multiplying the total of the self-employment income of by 13.3%. However, this amount would depend if work-related expenses against the $4,000 is claimed.
This tax gets paid no matter what age an individual may be or what type it is.
In general, any work an individual creates that would receive royalties on those works is subject to self-employment tax. This is reported on a 1040 Schedule C form. Any royalties from works an individual did not create but had acquired the rights to those works would not be subject to the self-employment tax.
As seen in this article, social security self employment tax can be confusing. Filing the correct forms are important and one needs to know who they can turn to for the knowledge and assistance they require. Each situation is unique and may not be addressed in this article; therefore, consulting with Experts online is fast, affordable and convenient for everyone. Experts can help answer specific self-employment tax questions when you need them answered.