Self-employment tax = Net Earnings × 92.35% × 15.3%.

The 15.3% consists of Social Security (12.4% on income up to $176,100) and Medicare (2.9% on all income).

Example: $70,000 net profit × 0.9235 = $64,645 × 0.153 = $9,891 SE tax.

Additionally, if total income exceeds $200,000 (single) or $250,000 (married filing jointly), a 0.9% Additional Medicare Tax applies to the excess.

The 92.35% factor represents the employer-equivalent deduction built into the calculation.

The 2025 Social Security wage base is $176,100, up from $168,600 in 2024 (4.5% increase).

Only the first $176,100 of combined wages and self-employment income is subject to the 12.4% Social Security tax.

Medicare has no wage base limit—the 2.9% tax applies to all earnings.

This means maximum Social Security tax for self-employed is $21,836 ($176,100 × 0.9235 × 0.124), while Medicare tax continues on all income above this threshold.

Quarterly estimated tax payments for 2025 are due: Q1 - April 15, 2025 (for Jan-Mar income), Q2 - June 16, 2025 (for Apr-May), Q3 - September 15, 2025 (for Jun-Aug), Q4 - January 15, 2026 (for Sep-Dec 2025).

If the due date falls on a weekend or holiday, payment is due the next business day.

Use Form 1040-ES to calculate and submit payments via IRS Direct Pay, EFTPS, or by mail.

Missing deadlines incurs interest and potential underpayment penalties.

Yes, you can deduct 50% of your self-employment tax as an above-the-line deduction (adjusting gross income).

This represents the "employer portion" of the tax.

For example, if your SE tax is $10,000, you can deduct $5,000 on Schedule 1, Line 15, reducing your AGI.

This deduction is available even if you take the standard deduction (don't need to itemize).

The deduction reduces income tax but not self-employment tax itself.

Additional Medicare Tax of 0.9% applies when combined wages and self-employment income exceed: $200,000 (single), $250,000 (married filing jointly), or $125,000 (married filing separately).

Unlike regular Medicare tax (2.9%), there's no employer match for the additional tax.

Example: Single filer with $220,000 net SE income pays regular Medicare ($220,000 × 0.9235 × 0.029 = $5,896) plus Additional Medicare (($220,000 - $200,000) × 0.009 = $180).

Employers withhold this on wages above $200,000 regardless of filing status.

You must pay self-employment tax if net earnings from self-employment are $400 or more (about $433 in gross income after the 92.35% adjustment).

This threshold is much lower than income tax filing requirements.

Even if you don't owe income tax, you still owe SE tax above $400 net earnings.

Exception: If your only self-employment income is from church employee income of $108.28 or more, you owe SE tax.

Students and retirees with small self-employment income are still subject to SE tax.