👕 Self-Employment Tax Calculation

The self-employment tax owed by an individual can be calculated with this formula:

➡️ First, determine your net earnings from self-employment, which means gross income minus allowable deductions.

➡️ Then, multiply this net amount by 92.35% to account for an allowed deduction for the portion of self-employment tax paid.

➡️ From this adjusted figure, calculate 15.3% to cover both the Social Security and Medicare charges.

➡️ For earnings exceeding thresholds set by the IRS (see the table below), add the Medicare surtax of 0.9%.

💻Source

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