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Frequently Asked Questions

Tax Obligations

Like Social Security and Medicare taxes withheld for most employees, self-employment taxes are the Social Security and Medicare amounts withheld on income primarily for individuals who work for themselves. You must pay self-employment tax if your net earnings from self-employment (not church related) are $400 or more, or if you made $108.28 or more as a church employee. Special self-employment tax rules for caregivers, or individuals who work in the homes of elderly or disabled individuals, can be found in Publication 926.

The self-employment tax rate for income earned in 2014 is 15.3%. This rate is broken down into 12.4% for Social Security (old-age, survivors, and disability insurance) on earnings up to $118,500 and 2.9% for Medicare (hospital insurance). In addition, if your adjusted gross income (AGI) is more than $200,000 ($250,000 if married filing jointly), the income over this AGI is subject to an additional 0.9% additional Medicare tax.

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