US tax code provides that every self-employed individual must pay the Social Security and Medicare tax if self-employment earnings of $400 or more. So, if you are a professional or freelancer, independent contractor, or own a small business, you are responsible for paying your own self-employment taxes. There this IRS self employment tax calculator will help you tremendously.
2021 Self Employment Tax Calculator
2021 Self -Employment Tax Rate
For 2021, the self-employment tax rate is as under:
- 12.4% on the first $142,800 of self-employment income plus
- 2.90% Medicare tax on the first $200,000 of self-employment income ($250,000 of combined self-employment income on a joint return, $125,000 on a separate return), (Code Sec. 1401(a), Code Sec. 1401(b)), plus
- 2.90% regular Medicare tax + 0.9% additional Medicare tax) on all self-employment income in excess of $200,000 ($250,000 of combined self-employment income on a joint return, $125,000 for married taxpayers filing a separate return). (Code Sec. 1401(b)(2)).
Remember, the maximum social security tax is capped at 12.4% of $142,800 which is $17707.2 and maximum Medicare Tax is 2.9% of $142,800 i.e $4,414.2
Additional Medicare Tax Threshold
In 2021 ,a self employed person is also liable for Additional Medicare Tax @ 0.9 % of your wages or self-employment income (together with that of his or her spouse if filing a joint return) if the same exceed the threshold amount given for a filing status
| Filing Status | Threshold Amount |
|---|---|
| Married filing jointly | $250,000 |
| Married filing separate | $125,000 |
| Single | $200,000 |
| Head of household (with qualifying person) | $200,000 |
| Qualifying widow(er) with dependent child | $200,000 |
You can think of self-employment tax for businessman similar to the FICA tax is deducted from employees or wage earners.