The self employment tax rate is double the rate of
Question:
What is the basic rate for self-employment tax?
Answer:
The tax on self-employment is double as much as the tax on Social Security and Medicare. People who make $400 or more from self-employment must pay a self-employment tax. People who work for themselves can be seen as both bosses and employees. The Self-Employed Contributions Act (SECA) was passed by the federal government in 1954 to make sure that self-employed people were still paid into Social Security and Medicare. The law sets a limit on how much net income is taxed by Social Security. Anything that costs more than that is not taxed. This includes people who own their own businesses as well as freelancers and people who work for themselves. You don’t have to pay self-employment tax on the money you get from an employer if the employer already took out taxes from your paycheck.
