How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Lev Your Own Question
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 29571
Experience:  Taxes, Immigration, Labor Relations
Type Your Tax Question Here...
Lev is online now
A new question is answered every 9 seconds

Do I need to pay the selfemployment tax even though the Max

This answer was rated:

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.
Lev and 2 other Tax Specialists are ready to help you

Related Tax Questions