{"id":130690,"date":"2024-02-07T17:48:48","date_gmt":"2024-02-07T17:48:48","guid":{"rendered":"https:\/\/ccm-swiss.com\/?p=130690"},"modified":"2024-09-13T23:12:26","modified_gmt":"2024-09-13T23:12:26","slug":"how-self-employment-tax-works","status":"publish","type":"post","link":"https:\/\/ccm-swiss.com\/index.php\/2024\/02\/07\/how-self-employment-tax-works\/","title":{"rendered":"How Self-Employment Tax Works"},"content":{"rendered":"

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Keep in mind self-employment taxes only account for part of your total tax liability. In addition to self-employment taxes, you will also be required to pay federal and state income taxes, among other local and state mandated taxes including state and use tax. Despite the name \u201cquarterly estimated tax payments,\u201d the schedule for filing these tax payments doesn\u2019t break down into three-month quarters.<\/p>\n

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This is done to achieve more fairness in the treatment of permanent, salaried employees versus self-employed professionals. As salaried employees split the 15.3% tax rate with their employers, they\u2019re essentially paying 7.65% of their earnings in FICA taxes. When we subtract 7.65% from 100% of self-employed earnings, we\u2019re left with 92.35%.<\/p>\n

How To Figure Estimated Tax<\/h2>\n

Of these tasks, that range from client acquisition through to business management, tax filing is often the most dreaded. This makes sense when we consider that about half of US citizens lack fundamental tax knowledge, as suggested by a NerdWallet and Harris Poll survey. In this article, we\u2019ll give you an overview of what FICA (or self-employment) tax is, who is required to pay it, and how it can be calculated.<\/p>\n