SE Tax

Question 1

Percentages of SE Tax

Answer 1

• OASDI - 6.2% for employee and employer
  
  • So 12.4% total
• Medicare - 1.45% for employee and employer
  
  • Total of 2.9%
• Total SE tax is 15.3% on self-employemnt income greater than $400
• Remember there is a threshold for OASDI tax, but Medicare is always taxed!
• Self-employed can deduct ONE HALF of SE tax.

Question 2

Medicare Surcharge Tax

Answer 2

• Additonal 0.9% is applied to wages, compensation, and self-employment income above threshold amount