2020 Self Employment Tax Calculator
The self employed tax calculator is a quick tool based on Internal Revenue Code, Â§ 1401 to help a freelancer or self-employed taxpayer to compute two taxes – the Social Security tax and Medicare tax. These taxes must be paid by every individual carrying on business or profession on his employment income if such an income is more is $400 or more. Or, he/she earns $108.28 or more in income from church employment.
What is the self-employment tax rate?
The total self-employment tax rate is 15.3% comprising of 12.4% for Social Security and 2.9% for Medicare for both 2020 and 2019. But note that social security tax is applied on maximum maxed $137,700 for the tax year 2020 (This was $132,000 for 2019). Therefore, in tax year 2020 , Social Security tax only applies to the first $137,700 of your combined income from wages and self-employment. No such limits apply to the computation of Medicare tax.
Calculator for self employed tax
What is additional medicare tax?
IRC imposes an additional Medicare tax of 0.9% if the self-employment income of a person crosses following thresholds based on their filing status:
- Married filing jointly: $250,000
- Married filing separately: $125,000
- All other filing statuses: $200,000
When to pay self employment tax?
You need to report your self-employment earnings via IRS Schedule C and also IRS Schedule SE to calculate how much self-employment tax you owe. Then, you may need to examine if you need to pay estimated tax which is to be paid quarterly .. I suggest you to read Estimated Tax :Who ,When & How to Pay ?. See this calculator on the estimated tax penalty calculator.