How To File Self-Employment Taxes
Need to know how to file self-employment taxes? In order to file self-employment taxes, you will need to know your gross income and any qualifying deductions. The self-employment tax form, Schedule SE, is required when filing your federal tax return because you are expected to pay Social Security and Medicare tax on all of your earnings after deductions are subtracted from the gross income.
To file self-employment taxes, you will need:
- Knowledge of your deductions
- Knowledge of your gross income
- Form 1040, including Schedule SE and Schedule C
- Start with the Schedule C, which is where you list your deductions that you had with your business to start the process of filing self-employment taxes. Make sure that you have receipts for any deductions claimed and that you only claim deductions that are for maintaining your business.
- Calculate the Schedule C and enter the profit or loss from line 31 on the 1040 form line 12 and then on the Schedule SE form line 2. If you have a loss after the deductions, put that number in parentheses to represent a loss.
- Complete the Schedule SE form if you have a profit. You will make any additional entries and use the formulas on the form to determine the self-employment tax. On line 4, you multiply the profit by 0.9235. If the amount is less than $400, you can stop and owe no self-employment tax.
- Calculate line 5 if more than $400. Do this by multiplying the amount on line 4 by 0.153 if the amount is less than $106,800 or by 0.029 if the amount is more than $106,800. To file self-employment taxes, enter the figure on line 5 and the 1040 form line 56. Multiply that number by 0.50 and enter this amount on line 6 and on the 1040 line 27.
- Complete the 1040 form. Enter any additional deductions, credits and payments that you may have made. If you made estimated quarterly payments, you will enter that amount on line 62 of the 1040 form. Complete the 1040 form and mail it to the IRS with the Schedule C, Schedule SE and any 1099 forms or W-2 forms.
Make sure to take all deductions that apply to the business. If you cannot send along any payments owed, still file the self-employment taxes and the IRS will send you a bill with penalties and interest charges added in.