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LSDefine

Simple English definitions for legal terms

Self-employment tax

Read a random definition: code pleading

A quick definition of Self-employment tax:

Self-employment tax: When someone works for themselves, they have to pay a special tax called self-employment tax. This tax is made up of two parts: Social Security tax and Medicare tax. Social Security tax is 12.4% of the money they make, up to a certain amount each year. Medicare tax is 2.9% of all the money they make. If they make more than $200,000, they have to pay an extra 0.9% for Medicare tax. Self-employed people have to pay both parts of the tax, but they can take some of it off their taxes as a business expense.

If you want to know how much self-employment tax you have to pay, you can use a tool to calculate it.

A more thorough explanation:

Self-employment tax is a tax that people who work for themselves have to pay on their profits. It includes two parts: Social Security taxes and Medicare taxes. Social Security taxes are 12.4% of a person's profits up to a certain amount each year, which is currently $142,800. Medicare taxes are 2.9% on all profits, but if a person's wages exceed $200,000, an extra 0.9% Medicare tax applies. Unlike regular employees, self-employed people have to pay both the individual and employer parts of FICA taxes, but they can deduct the employer portions as business expenses.

For example, if someone runs a small business and makes a profit of $50,000 in a year, they would have to pay $6,200 in Social Security taxes and $1,450 in Medicare taxes. This means they would have to pay a total of $7,650 in self-employment tax.

Another example would be a freelance writer who earns $100,000 in a year. They would have to pay $12,400 in Social Security taxes and $2,900 in Medicare taxes. If they also had to pay an extra 0.9% Medicare tax, they would have to pay an additional $900. This means they would have to pay a total of $16,200 in self-employment tax.

These examples illustrate how self-employment tax works and how it can affect people who work for themselves. It's important for self-employed individuals to understand how much they owe in taxes and to budget accordingly.

self-employed | Self-executing

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General

General chat about the legal profession.
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ALSO CONGRATS!
Congrats1!
21:15
Miami A, yall I'm so excited I could cry.
21:15
Feel like I can finally stop holding my breath!! Whew!!!
[] baddestbunny
22:16
every time I get accosted by a strange man who follows me around because my male coworkers were too busy talking to walk me back to my car I get closer to saying we need to bring back traditional gender roles
Dkk
22:32
Nice! @Macaque
Dkk
22:32
@Aromatic, Have to guess.
Dkk
22:33
That sucks @Bunny do you have to go to the hospital?
[] baddestbunny
22:40
I said accosted not assaulted
23:35
guys. my notre dame address just went long is this good or bad
1a2b3c4d26z
23:37
Oooooo me too
23:37
omg is this good or bad
Dkk
23:47
Idk if gender roles are gunna fix that then.
23:49
it looks like most people who applied in october last cycle didn't get a decision until january... does it even mean anything that our addresses went long??
hows ED 2 compared to ED 1?
Dkk
0:10
No idea
windyMagician
0:34
reporting live to say my ndls address also went long
does it mean anything ^
Dkk
2:21
NDLS and Fordham took a very long time last year. It's good info for people to know.
[] baddestbunny
4:29
let’s get after it boys and girls
Dkk
5:21
I gtg to bed soon.
Dkk
5:22
Big day today. Gunna be a crazy one. I will sleep through the first half.
good morning lsd it is 5 am EST
also jazzy my ndls address went long ages ago i sadly do not think it means anything
my stanford address also went long LOL i think at most it's an indicator it's under review
WorthlessAttractiveZombie
7:44
My berkeley paragraph finally disappeared. I definitely think it is just an indicator that they are actively reviewing files, and does not mean anything about A, WL, or Rs
WorthlessAttractiveZombie
7:46
Also has anyone's date disappeared for W&L? Mine did last night
7:55
@WorthlessAttractiveZombie: mine did yesterday morning
7:56
Oops sorry I meant Vilanova. Mine disappeared last week
soapy
8:48
UMN under review! As predicted, decisions are gonna come out early December
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