{"id":3857,"date":"2025-06-04T13:50:57","date_gmt":"2025-06-04T13:50:57","guid":{"rendered":"https:\/\/legendfusions.com\/usa\/?p=3857"},"modified":"2025-11-21T10:01:40","modified_gmt":"2025-11-21T10:01:40","slug":"self-employment-tax-instructions","status":"publish","type":"post","link":"https:\/\/legendfusions.com\/usa\/self-employment-tax-instructions\/","title":{"rendered":"Self Employment Tax Instructions: A Complete Guide"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-post\" data-elementor-id=\"3857\" class=\"elementor elementor-3857\" data-elementor-post-type=\"post\">\n\t\t\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-bd86005 pbmit-col-stretched-none pbmit-cursor-color-blackish-color pbmit-bg-color-over-image elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"bd86005\" data-element_type=\"section\" data-e-type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-7ee7aa2 pbmit-bg-color-over-image\" data-id=\"7ee7aa2\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-0e7c0b9 elementor-widget elementor-widget-text-editor\" data-id=\"0e7c0b9\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p>Earning money on your own terms initially feels freeing, until you have to deal with taxes. Unlike employees who are subject to payroll taxes, you are responsible for your taxes when you are self-employed.\u00a0<\/p>\n<p>Many new freelancers, contractors, and small business owners often overlook this aspect, usually because simply thinking about it feels burdensome. It\u2019s not when you have simple self employment tax instructions to refer to. Read our complete guide.\u00a0\u00a0<\/p>\n<p><!-- \/wp:html --><!-- \/wp:columns --><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-c7f8313 elementor-toc--minimized-on-tablet elementor-widget elementor-widget-table-of-contents\" data-id=\"c7f8313\" data-element_type=\"widget\" data-e-type=\"widget\" data-settings=\"{&quot;headings_by_tags&quot;:[&quot;h2&quot;,&quot;h3&quot;],&quot;exclude_headings_by_selector&quot;:[],&quot;no_headings_message&quot;:&quot;No headings were found on this page.&quot;,&quot;marker_view&quot;:&quot;bullets&quot;,&quot;icon&quot;:{&quot;value&quot;:&quot;fas fa-circle&quot;,&quot;library&quot;:&quot;fa-solid&quot;},&quot;minimize_box&quot;:&quot;yes&quot;,&quot;minimized_on&quot;:&quot;tablet&quot;,&quot;hierarchical_view&quot;:&quot;yes&quot;,&quot;min_height&quot;:{&quot;unit&quot;:&quot;px&quot;,&quot;size&quot;:&quot;&quot;,&quot;sizes&quot;:[]},&quot;min_height_tablet&quot;:{&quot;unit&quot;:&quot;px&quot;,&quot;size&quot;:&quot;&quot;,&quot;sizes&quot;:[]},&quot;min_height_mobile&quot;:{&quot;unit&quot;:&quot;px&quot;,&quot;size&quot;:&quot;&quot;,&quot;sizes&quot;:[]}}\" data-widget_type=\"table-of-contents.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<div class=\"elementor-toc__header\">\n\t\t\t\t\t\t<h4 class=\"elementor-toc__header-title\">\n\t\t\t\tContents\t\t\t<\/h4>\n\t\t\t\t\t\t\t\t\t\t<div class=\"elementor-toc__toggle-button elementor-toc__toggle-button--expand\" role=\"button\" tabindex=\"0\" aria-controls=\"elementor-toc__c7f8313\" aria-expanded=\"true\" aria-label=\"Open table of contents\"><i aria-hidden=\"true\" class=\"fas fa-chevron-down\"><\/i><\/div>\n\t\t\t\t<div class=\"elementor-toc__toggle-button elementor-toc__toggle-button--collapse\" role=\"button\" tabindex=\"0\" aria-controls=\"elementor-toc__c7f8313\" aria-expanded=\"true\" aria-label=\"Close table of contents\"><i aria-hidden=\"true\" class=\"fas fa-chevron-up\"><\/i><\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<div id=\"elementor-toc__c7f8313\" class=\"elementor-toc__body\">\n\t\t\t<div class=\"elementor-toc__spinner-container\">\n\t\t\t\t<i class=\"elementor-toc__spinner eicon-animation-spin eicon-loading\" aria-hidden=\"true\"><\/i>\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-a52a5da elementor-widget elementor-widget-pbmit_custom_heading\" data-id=\"a52a5da\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"pbmit_custom_heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t<div class=\"pbmit-custom-heading \"><h2 class=\"pbmit-element-title\">\r\n\t\t\t\r\n\t\t\t\tWhat Is Self Employment Tax? \r\n\t\t\t\r\n\t\t\t<\/h2>\r\n\t\t<\/div>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-c15360d elementor-widget elementor-widget-text-editor\" data-id=\"c15360d\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p>Think of self-employment tax as the umbrella term for your Social Security and Medicare taxes. When you are an employee, your employer withholds a portion of your wages to cover these taxes, also called FICA (Federal Insurance Contributions Act) taxes. Your employer also contributes an equal amount.\u00a0\u00a0<\/p>\n<p>However, as self-employed, you are considered both the employer and the employee. This means you are responsible for paying both the half of these taxes.\u00a0<\/p>\n<p>The purpose of these taxes is to fund Social Security benefits (retirement, disability, survivor benefits) and Medicare (healthcare for the elderly and disabled).\u00a0\u00a0<\/p>\n<p><!-- \/wp:html --><!-- \/wp:columns --><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-7d1e66a pbmit-animation-none elementor-widget elementor-widget-image\" data-id=\"7d1e66a\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"image.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<img fetchpriority=\"high\" decoding=\"async\" width=\"847\" height=\"476\" src=\"https:\/\/legendfusions.com\/usa\/wp-content\/uploads\/2025\/06\/45-BA250504LFnUSA-1-1024x576.webp\" class=\"attachment-large size-large wp-image-3893\" alt=\"What Is Self Employment Tax\" srcset=\"https:\/\/legendfusions.com\/usa\/wp-content\/uploads\/2025\/06\/45-BA250504LFnUSA-1-1024x576.webp 1024w, https:\/\/legendfusions.com\/usa\/wp-content\/uploads\/2025\/06\/45-BA250504LFnUSA-1-300x169.webp 300w, https:\/\/legendfusions.com\/usa\/wp-content\/uploads\/2025\/06\/45-BA250504LFnUSA-1-768x432.webp 768w, https:\/\/legendfusions.com\/usa\/wp-content\/uploads\/2025\/06\/45-BA250504LFnUSA-1.webp 1500w\" sizes=\"(max-width: 847px) 100vw, 847px\" \/>\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-5ea612e elementor-widget elementor-widget-pbmit_custom_heading\" data-id=\"5ea612e\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"pbmit_custom_heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t<div class=\"pbmit-custom-heading \"><h3 class=\"pbmit-element-title\">\r\n\t\t\t\r\n\t\t\t\tWho Pays Self Employment Tax \r\n\t\t\t\r\n\t\t\t<\/h3>\r\n\t\t<\/div>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-9662bea elementor-widget elementor-widget-text-editor\" data-id=\"9662bea\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><span data-contrast=\"auto\">If you earn $400 or more in a tax year, even if it\u2019s merely from a side hustle, you are generally considered self-employed and will need to pay self-employment tax.<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:257}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">The self-employed category is broad, usually including sole proprietors, individuals in a <\/span><b><span data-contrast=\"auto\">partnership<\/span><\/b><span data-contrast=\"auto\">, and independent contractors.<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:257}\">\u00a0<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-4240426 elementor-widget elementor-widget-pbmit_custom_heading\" data-id=\"4240426\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"pbmit_custom_heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t<div class=\"pbmit-custom-heading \"><h3 class=\"pbmit-element-title\">\r\n\t\t\t\r\n\t\t\t\tSelf-Employment Tax vs Federal Tax \r\n\t\t\t\r\n\t\t\t<\/h3>\r\n\t\t<\/div>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-cfc5b93 elementor-widget elementor-widget-text-editor\" data-id=\"cfc5b93\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><span data-contrast=\"none\">Let\u2019s clarify a common misconception: self-employment tax does not automatically equate to federal income tax. Your self-employment income may also be subject to <\/span><b><span data-contrast=\"none\">state income tax<\/span><\/b><span data-contrast=\"none\"> if the state where you live or are doing business imposes it. You usually have to pay for both.<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:278}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">You might be also interested in: <\/span><span style=\"color: #3366ff;\"><a style=\"color: #3366ff;\" href=\"https:\/\/legendfusions.com\/usa\/tax-implications-of-moving-to-another-state\/\">Why Might Preparing Taxes Be Different for People Living in Different States<\/a><\/span><span data-contrast=\"none\">?<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:278}\">\u00a0<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-76e228a elementor-widget elementor-widget-pbmit_custom_heading\" data-id=\"76e228a\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"pbmit_custom_heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t<div class=\"pbmit-custom-heading \"><h2 class=\"pbmit-element-title\">\r\n\t\t\t\r\n\t\t\t\tWhat Are the Self-Employment Tax Rates? \r\n\t\t\t\r\n\t\t\t<\/h2>\r\n\t\t<\/div>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-f41796c elementor-widget elementor-widget-text-editor\" data-id=\"f41796c\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p>The current self employment tax rate is 15.3% of your net earnings from self-employment. This 15.3% is broken down into two main parts:\u00a0<\/p><ul><li>Social Security: 12.4%\u00a0<\/li><li>Medicare: 2.9%\u00a0<\/li><\/ul><p><span style=\"color: #3366ff;\"><a style=\"color: #3366ff;\" href=\"https:\/\/legendfusions.com\/usa\/how-to-calculate-social-security-tax\/\">Social Security Tax<\/a><\/span> has a limit. The 12.4% tax portion above only applies up to a certain annual earnings limit (also known as the \u2018wage base\u2019). This limit changes each year. In 2025, the limit is $176,100. Over this amount, you stop paying the 12.4% self employment tax percentage.\u00a0\u00a0<\/p><p>The 2.9% Medicare portion, however, has no earnings limit; it applies to all your net earnings.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-a98b76a elementor-widget elementor-widget-pbmit_custom_heading\" data-id=\"a98b76a\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"pbmit_custom_heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t<div class=\"pbmit-custom-heading \"><h3 class=\"pbmit-element-title\">\r\n\t\t\t\r\n\t\t\t\tAdditional Medicare Tax \r\n\t\t\t\r\n\t\t\t<\/h3>\r\n\t\t<\/div>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-205cc29 elementor-widget elementor-widget-text-editor\" data-id=\"205cc29\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p>If you are a higher-income earner, you will most likely be charged an Additional Medicare Tax of 0.9%. This applies to earned income (including net earnings from self-employment) above certain thresholds. In 2025, thresholds are at:\u00a0\u00a0<\/p>\n<ul>\n<li data-leveltext=\"\u00b7\" data-font=\"Symbol\" data-listid=\"9\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\u00b7&quot;,&quot;469777815&quot;:&quot;hybridMultilevel&quot;}\" aria-setsize=\"-1\" data-aria-posinset=\"1\" data-aria-level=\"1\">$200,000 for single filers\u00a0<\/li>\n<\/ul>\n<ul>\n<li data-leveltext=\"\u00b7\" data-font=\"Symbol\" data-listid=\"9\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\u00b7&quot;,&quot;469777815&quot;:&quot;hybridMultilevel&quot;}\" aria-setsize=\"-1\" data-aria-posinset=\"2\" data-aria-level=\"1\">$250,000 for married filing jointly\u00a0<\/li>\n<\/ul>\n<ul>\n<li data-leveltext=\"\u00b7\" data-font=\"Symbol\" data-listid=\"9\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\u00b7&quot;,&quot;469777815&quot;:&quot;hybridMultilevel&quot;}\" aria-setsize=\"-1\" data-aria-posinset=\"3\" data-aria-level=\"1\">and $125,000 for married filing separately\u00a0<\/li>\n<\/ul>\n<p>This tax only applies to an individual; there is no employer equivalent.\u00a0<\/p>\n<p>Check out our guide to\u00a0 <span style=\"color: #3366ff;\"><a style=\"color: #3366ff;\" href=\"https:\/\/legendfusions.com\/usa\/us-tax-brackets-2025\/\">self employment tax brackets<\/a><\/span> in 2025.\u00a0\u00a0<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-2807de8 elementor-widget elementor-widget-pbmit_custom_heading\" data-id=\"2807de8\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"pbmit_custom_heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t<div class=\"pbmit-custom-heading \"><h2 class=\"pbmit-element-title\">\r\n\t\t\t\r\n\t\t\t\tHow to Calculate Your Net Earnings \r\n\t\t\t\r\n\t\t\t<\/h2>\r\n\t\t<\/div>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-45f8e26 elementor-widget elementor-widget-text-editor\" data-id=\"45f8e26\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><span class=\"TextRun SCXW86262306 BCX0\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"none\"><span class=\"NormalTextRun SCXW86262306 BCX0\">Your net earnings are your gross income minus your allowable expenses. <\/span><span class=\"NormalTextRun SCXW86262306 BCX0\">Here\u2019s<\/span> <span class=\"NormalTextRun SCXW86262306 BCX0\">a simple way<\/span><span class=\"NormalTextRun SCXW86262306 BCX0\"> to calculate:<\/span><\/span><span class=\"EOP SCXW86262306 BCX0\" data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:240,&quot;335559740&quot;:278}\">\u00a0<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-1ad8dfc elementor-widget elementor-widget-pbmit_custom_heading\" data-id=\"1ad8dfc\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"pbmit_custom_heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t<div class=\"pbmit-custom-heading \"><h3 class=\"pbmit-element-title\">\r\n\t\t\t\r\n\t\t\t\t1. Start with Gross Earned Income \r\n\t\t\t\r\n\t\t\t<\/h3>\r\n\t\t<\/div>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-6e01eb8 elementor-widget elementor-widget-text-editor\" data-id=\"6e01eb8\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><span class=\"TextRun SCXW103281006 BCX0\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"none\"><span class=\"NormalTextRun SCXW103281006 BCX0\">This is all the money you received from your self-employment activities. You might receive <\/span><\/span><span class=\"TextRun MacChromeBold SCXW103281006 BCX0\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"none\"><span class=\"NormalTextRun SCXW103281006 BCX0\">Form 1099-MISC<\/span><\/span><span class=\"TextRun SCXW103281006 BCX0\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"none\"><span class=\"NormalTextRun SCXW103281006 BCX0\"> or Form 1099-NEC from clients, but it is your responsibility to report all income, even if you do not receive these <\/span><\/span><span class=\"TextRun MacChromeBold SCXW103281006 BCX0\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"none\"><span class=\"NormalTextRun SCXW103281006 BCX0\">tax forms<\/span><\/span><span class=\"TextRun SCXW103281006 BCX0\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"none\"><span class=\"NormalTextRun SCXW103281006 BCX0\">.<\/span><\/span><span class=\"EOP SCXW103281006 BCX0\" data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:278}\">\u00a0<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-848d924 elementor-widget elementor-widget-pbmit_custom_heading\" data-id=\"848d924\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"pbmit_custom_heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t<div class=\"pbmit-custom-heading \"><h3 class=\"pbmit-element-title\">\r\n\t\t\t\r\n\t\t\t\t2. Subtract Allowable Expenses \r\n\t\t\t\r\n\t\t\t<\/h3>\r\n\t\t<\/div>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-81ee09d elementor-widget elementor-widget-text-editor\" data-id=\"81ee09d\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p>This is where good bookkeeping truly pays off. The more legitimate business expenses you can deduct, the lower your net earnings will be, and consequently, the less self-employment tax you will owe. Common expenses include:\u00a0\u00a0<\/p>\n<ul>\n<li>Office supplies and software\u00a0<\/li>\n<li>Advertising and marketing costs\u00a0<\/li>\n<li>Professional fees (e.g., legal or accounting)\u00a0<\/li>\n<li>Home office deductions (if you meet specific requirements)\u00a0<\/li>\n<li>Business travel and meals (subject to specific rules)\u00a0<\/li>\n<li>Depreciation on business assets (e.g., equipment, certain vehicles)\u00a0<\/li>\n<li>Insurance premiums related to your business\u00a0<\/li>\n<li>Web hosting and domain fees\u00a0<\/li>\n<\/ul>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-760b365 elementor-widget elementor-widget-pbmit_custom_heading\" data-id=\"760b365\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"pbmit_custom_heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t<div class=\"pbmit-custom-heading \"><h3 class=\"pbmit-element-title\">\r\n\t\t\t\r\n\t\t\t\t3. Apply the 92.35% Rule \r\n\t\t\t\r\n\t\t\t<\/h3>\r\n\t\t<\/div>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-35aad33 elementor-widget elementor-widget-text-editor\" data-id=\"35aad33\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p>Here\u2019s a key detail: The IRS only subjects 92.35% of your self-employment net earnings to self-employment tax. This accounts for the employer&#8217;s share of FICA taxes.\u00a0<\/p>\n<p>Example: If your gross earned income is $60,000 and your allowable expenses are $10,000, your net earnings would be $50,000. You would then multiply $50,000 by 92.35% (=$46,175) to find the amount subject to self-employment tax. Then, multiply this by 15.3% to get your actual self-employment tax.\u00a0<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-181e72c elementor-widget elementor-widget-pbmit_custom_heading\" data-id=\"181e72c\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"pbmit_custom_heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t<div class=\"pbmit-custom-heading \"><h3 class=\"pbmit-element-title\">\r\n\t\t\t\r\n\t\t\t\tSpecial Considerations \r\n\t\t\t\r\n\t\t\t<\/h3>\r\n\t\t<\/div>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-72fa6ee elementor-widget elementor-widget-pbmit_custom_heading\" data-id=\"72fa6ee\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"pbmit_custom_heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t<div class=\"pbmit-custom-heading \"><h4 class=\"pbmit-element-title\">\r\n\t\t\t\r\n\t\t\t\tWhen Having Multiple Jobs \r\n\t\t\t\r\n\t\t\t<\/h4>\r\n\t\t<\/div>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-db2fbaa elementor-widget elementor-widget-text-editor\" data-id=\"db2fbaa\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><span data-contrast=\"none\">If you are both self-employed and employed, your employer&#8217;s Social Security and Medicare taxes contributions count towards your annual limits.\u00a0<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:278}\">\u00a0<\/span><\/p><p><span data-contrast=\"none\">You will still calculate your self-employment tax on your net earnings from self-employment, but your overall Social Security tax might cap out if your combined earned income reaches the annual limit.<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:278}\">\u00a0<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-1b311fb elementor-widget elementor-widget-pbmit_custom_heading\" data-id=\"1b311fb\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"pbmit_custom_heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t<div class=\"pbmit-custom-heading \"><h4 class=\"pbmit-element-title\">\r\n\t\t\t\r\n\t\t\t\tForeign Earned Income Exclusion (Form 2555) \r\n\t\t\t\r\n\t\t\t<\/h4>\r\n\t\t<\/div>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-74506d9 elementor-widget elementor-widget-text-editor\" data-id=\"74506d9\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><span class=\"TextRun SCXW22448023 BCX0\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"none\"><span class=\"NormalTextRun SCXW22448023 BCX0\">For self-employed US citizens or resident aliens living and working abroad (in a foreign country or <\/span><\/span><span class=\"TextRun MacChromeBold SCXW22448023 BCX0\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"none\"><span class=\"NormalTextRun SCXW22448023 BCX0\">commonwealth<\/span><\/span><span class=\"TextRun SCXW22448023 BCX0\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"none\"><span class=\"NormalTextRun SCXW22448023 BCX0\">), the Foreign Earned Income Exclusion (FEIE) on <\/span><\/span><span class=\"TextRun MacChromeBold SCXW22448023 BCX0\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"none\"><span class=\"NormalTextRun SCXW22448023 BCX0\">Form 2555<\/span><\/span><span class=\"TextRun SCXW22448023 BCX0\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"none\"><span class=\"NormalTextRun SCXW22448023 BCX0\"> allows you to exclude a certain amount of foreign earned income from US income tax. However, note that this excluded income is <\/span><span class=\"NormalTextRun SCXW22448023 BCX0\">generally still<\/span><span class=\"NormalTextRun SCXW22448023 BCX0\"> subject to self-employment tax.<\/span><\/span><span class=\"EOP SCXW22448023 BCX0\" data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:278}\">\u00a0<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-4d3a6f7 elementor-widget elementor-widget-pbmit_custom_heading\" data-id=\"4d3a6f7\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"pbmit_custom_heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t<div class=\"pbmit-custom-heading \"><h2 class=\"pbmit-element-title\">\r\n\t\t\t\r\n\t\t\t\tHow to File Self-Employment Taxes \r\n\t\t\t\r\n\t\t\t<\/h2>\r\n\t\t<\/div>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-f0e32bc elementor-widget elementor-widget-text-editor\" data-id=\"f0e32bc\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><span class=\"TextRun SCXW159382831 BCX0\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"none\"><span class=\"NormalTextRun SCXW159382831 BCX0\">Your <\/span><\/span><span class=\"TextRun MacChromeBold SCXW159382831 BCX0\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"none\"><span class=\"NormalTextRun SCXW159382831 BCX0\">Form 1040 <\/span><\/span><span class=\"TextRun SCXW159382831 BCX0\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"none\"><span class=\"NormalTextRun SCXW159382831 BCX0\">has several parts, all of which are integrated into your annual federal <\/span><\/span><span class=\"TextRun MacChromeBold SCXW159382831 BCX0\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"none\"><span class=\"NormalTextRun SCXW159382831 BCX0\">tax returns<\/span><\/span><span class=\"TextRun SCXW159382831 BCX0\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"none\"><span class=\"NormalTextRun SCXW159382831 BCX0\">. Be sure to fill them in proper order:<\/span><\/span><span class=\"EOP SCXW159382831 BCX0\" data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:278}\">\u00a0<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-700f566 elementor-widget elementor-widget-pbmit_custom_heading\" data-id=\"700f566\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"pbmit_custom_heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t<div class=\"pbmit-custom-heading \"><h3 class=\"pbmit-element-title\">\r\n\t\t\t\r\n\t\t\t\t1. Schedule C: Profit or Loss from Business (Sole Proprietorship) \r\n\t\t\t\r\n\t\t\t<\/h3>\r\n\t\t<\/div>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-b43adc1 elementor-widget elementor-widget-text-editor\" data-id=\"b43adc1\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><span data-contrast=\"none\">Sole proprietors or independent contractors will generally use <\/span><b><span data-contrast=\"none\">Schedule C<\/span><\/b><span data-contrast=\"none\"> first to report their income and expenses. This form is where you list all your gross receipts and deductible business expenses to arrive at your net earnings (or loss) from self-employment.<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:278}\">\u00a0<\/span><\/p><p><span data-contrast=\"none\">You will be using the net earnings figure from your Schedule C to calculate your self-employment tax (see next part).<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:278}\">\u00a0<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-98a3e4a elementor-widget elementor-widget-pbmit_custom_heading\" data-id=\"98a3e4a\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"pbmit_custom_heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t<div class=\"pbmit-custom-heading \"><h3 class=\"pbmit-element-title\">\r\n\t\t\t\r\n\t\t\t\t2. Schedule SE: Self-Employment Tax \r\n\t\t\t\r\n\t\t\t<\/h3>\r\n\t\t<\/div>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-38c8506 elementor-widget elementor-widget-text-editor\" data-id=\"38c8506\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><span data-contrast=\"none\">This serves as your <\/span><b><span data-contrast=\"none\">calculator <\/span><\/b><span data-contrast=\"none\">tax form. You take the net earnings amount from Schedule C (or from Form 1065, Schedule K-1 if you are a partner in a <\/span><b><span data-contrast=\"none\">partnership<\/span><\/b><span data-contrast=\"none\">), apply the 92.35% rule, then multiply by the 15.3% self employment tax rate.\u00a0<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:278}\">\u00a0<\/span><\/p><p><span data-contrast=\"none\">Your <\/span><span style=\"color: #3366ff;\"><a style=\"color: #3366ff;\" href=\"https:\/\/www.irs.gov\/forms-pubs\/about-schedule-se-form-1040\" target=\"_blank\" rel=\"noopener\">Schedule SE<\/a><\/span><span data-contrast=\"none\"> will guide you through this calculation step-by-step. The resulting self-employment tax amount from Schedule SE is then transferred to your main Form 1040.<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:278}\">\u00a0<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-3c28cbb elementor-widget elementor-widget-pbmit_custom_heading\" data-id=\"3c28cbb\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"pbmit_custom_heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t<div class=\"pbmit-custom-heading \"><h3 class=\"pbmit-element-title\">\r\n\t\t\t\r\n\t\t\t\t3. Form 1040: U.S. Individual Income Tax Return \r\n\t\t\t\r\n\t\t\t<\/h3>\r\n\t\t<\/div>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-865c1c5 elementor-widget elementor-widget-text-editor\" data-id=\"865c1c5\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p>Your total self employment tax Schedule SE calculation will be reported on your main Form 1040, then used to work out your adjusted gross income (AGI) and consequently, tax bill. You are allowed to deduct one-half of your total self-employment tax paid from your gross income. It is an above-the-line deduction, meaning you do not need to itemize to claim it.\u00a0\u00a0<\/p><p>Example: If your calculated self-employment tax is $7,000, you can deduct $3,500 from your gross income on your Form 1040.\u00a0<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-aa49397 elementor-widget elementor-widget-pbmit_custom_heading\" data-id=\"aa49397\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"pbmit_custom_heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t<div class=\"pbmit-custom-heading \"><h2 class=\"pbmit-element-title\">\r\n\t\t\t\r\n\t\t\t\tHow to Pay Your Taxes to the IRS \r\n\t\t\t\r\n\t\t\t<\/h2>\r\n\t\t<\/div>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-b89309b elementor-widget elementor-widget-text-editor\" data-id=\"b89309b\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><span data-contrast=\"none\">The US operates on a \u2018pay-as-you-go&#8217; tax system. If you expect to owe at least $1,000 in tax for the year (including self-employment tax and income tax), you are generally required to make quarterly estimated <\/span><b><span data-contrast=\"none\">tax payments<\/span><\/b><span data-contrast=\"none\"> to the IRS:<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:278}\">\u00a0<\/span><\/p><ul><li><span data-contrast=\"none\">Q1 (Jan 1 to March 31): Due April 15<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335559685&quot;:720,&quot;335559737&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:0,&quot;335559740&quot;:278,&quot;335559991&quot;:360}\">\u00a0<\/span><\/li><li><span data-contrast=\"none\">Q2 (April 1 to May 31): Due June 15<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335559685&quot;:720,&quot;335559737&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:0,&quot;335559740&quot;:278,&quot;335559991&quot;:360}\">\u00a0<\/span><\/li><li><span data-contrast=\"none\">Q3 (June 1 to Aug 31): Due September 15<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335559685&quot;:720,&quot;335559737&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:0,&quot;335559740&quot;:278,&quot;335559991&quot;:360}\">\u00a0<\/span><\/li><li><span data-contrast=\"none\">Q4 (Sept 1 to Dec 31): Due January 15 of the next year<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335559685&quot;:720,&quot;335559737&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:0,&quot;335559740&quot;:278,&quot;335559991&quot;:360}\">\u00a0<\/span><\/li><\/ul><p><span data-contrast=\"none\">Not paying enough tax by these deadlines might lead to penalties.\u00a0<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:278}\">\u00a0<\/span><\/p><p><span style=\"color: #212c40;\"><b>Tip If You Are Also an Employee<\/b><\/span><span data-contrast=\"none\">: If you also have a W2 job (as an employee), you can increase the <\/span>withholding taxes<span data-contrast=\"none\"> from that job&#8217;s paycheck to cover your estimated self-employment tax liability. This might be simpler than making separate quarterly payments.<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:278}\">\u00a0<\/span><\/p><p><span data-contrast=\"none\">Relevant read: <\/span><span style=\"color: #3366ff;\"><a style=\"color: #3366ff;\" href=\"https:\/\/legendfusions.com\/usa\/how-to-fill-out-w4\/\">How to Fill Out W4, Employee\u2019s Withholding Certificate<\/a>\u00a0<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-63ede3b pbmit-animation-none elementor-widget elementor-widget-image\" data-id=\"63ede3b\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"image.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<img decoding=\"async\" width=\"847\" height=\"476\" src=\"https:\/\/legendfusions.com\/usa\/wp-content\/uploads\/2025\/06\/45-BA250504LFnUSA-1024x576.webp\" class=\"attachment-large size-large wp-image-3887\" alt=\"How to Pay Your Taxes to the IRS\" srcset=\"https:\/\/legendfusions.com\/usa\/wp-content\/uploads\/2025\/06\/45-BA250504LFnUSA-1024x576.webp 1024w, https:\/\/legendfusions.com\/usa\/wp-content\/uploads\/2025\/06\/45-BA250504LFnUSA-300x169.webp 300w, https:\/\/legendfusions.com\/usa\/wp-content\/uploads\/2025\/06\/45-BA250504LFnUSA-768x432.webp 768w, https:\/\/legendfusions.com\/usa\/wp-content\/uploads\/2025\/06\/45-BA250504LFnUSA.webp 1500w\" sizes=\"(max-width: 847px) 100vw, 847px\" \/>\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-9535499 elementor-widget elementor-widget-pbmit_custom_heading\" data-id=\"9535499\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"pbmit_custom_heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t<div class=\"pbmit-custom-heading \"><h2 class=\"pbmit-element-title\">\r\n\t\t\t\r\n\t\t\t\tHow to Lower Your Self-Employment Tax \r\n\t\t\t\r\n\t\t\t<\/h2>\r\n\t\t<\/div>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-8f3e484 elementor-widget elementor-widget-text-editor\" data-id=\"8f3e484\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><span class=\"TextRun SCXW71316061 BCX0\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"none\"><span class=\"NormalTextRun SCXW71316061 BCX0\">Aside from your legitimate business expenses and eligible deductions (in Form 1040), here are some <\/span><\/span><span class=\"TextRun MacChromeBold SCXW71316061 BCX0\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"none\"><span class=\"NormalTextRun SCXW71316061 BCX0\">tax planning <\/span><\/span><span class=\"TextRun SCXW71316061 BCX0\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"none\"><span class=\"NormalTextRun SCXW71316061 BCX0\">strategies that may help you lower your self-employment tax:<\/span><\/span><span class=\"EOP SCXW71316061 BCX0\" data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:278}\">\u00a0<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-a0e389f elementor-widget elementor-widget-pbmit_custom_heading\" data-id=\"a0e389f\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"pbmit_custom_heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t<div class=\"pbmit-custom-heading \"><h3 class=\"pbmit-element-title\">\r\n\t\t\t\r\n\t\t\t\tReview Your Bookkeeping System \r\n\t\t\t\r\n\t\t\t<\/h3>\r\n\t\t<\/div>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-3e0c061 elementor-widget elementor-widget-text-editor\" data-id=\"3e0c061\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><span class=\"TextRun SCXW13849955 BCX0\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"none\"><span class=\"NormalTextRun SCXW13849955 BCX0\">You cannot claim deductions if you do not track your receipts, invoices, bank statements, and mileage logs. Be sure to implement a strong <\/span><\/span><span style=\"color: #3366ff;\"><a class=\"Hyperlink SCXW13849955 BCX0\" style=\"color: #3366ff;\" href=\"https:\/\/legendfusions.com\/usa\/accounting-software-for-self-employed\/\" target=\"_blank\" rel=\"noreferrer noopener\"><span class=\"TextRun Underlined SCXW13849955 BCX0\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"none\"><span class=\"NormalTextRun SCXW13849955 BCX0\" data-ccp-charstyle=\"Hyperlink\">bookkeeping system<\/span><\/span><\/a><\/span><span class=\"TextRun SCXW13849955 BCX0\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"none\"><span class=\"NormalTextRun SCXW13849955 BCX0\"> from day one. This also helps you defend your claims <\/span><span class=\"NormalTextRun SCXW13849955 BCX0\">in <\/span><span class=\"NormalTextRun SCXW13849955 BCX0\">the <\/span><span class=\"NormalTextRun SCXW13849955 BCX0\">event<\/span><span class=\"NormalTextRun SCXW13849955 BCX0\"> of<\/span><span class=\"NormalTextRun SCXW13849955 BCX0\"> audits<\/span><span class=\"NormalTextRun SCXW13849955 BCX0\">.<\/span><\/span><span class=\"EOP SCXW13849955 BCX0\" data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:278}\">\u00a0<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-9dad4fb elementor-widget elementor-widget-pbmit_custom_heading\" data-id=\"9dad4fb\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"pbmit_custom_heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t<div class=\"pbmit-custom-heading \"><h3 class=\"pbmit-element-title\">\r\n\t\t\t\r\n\t\t\t\tConsider Your Business Structure \r\n\t\t\t\r\n\t\t\t<\/h3>\r\n\t\t<\/div>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-60bf650 elementor-widget elementor-widget-text-editor\" data-id=\"60bf650\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><span class=\"TextRun SCXW19418820 BCX0\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"none\"><span class=\"NormalTextRun SCXW19418820 BCX0\">This is a specialist topic but worth touching on. Some self-employed individuals consider electing to be taxed as an S Corporation. With an S Corp, you pay yourself a \u2018reasonable salary\u2019 (subject to <\/span><\/span><span style=\"color: #3366ff;\"><a class=\"Hyperlink SCXW19418820 BCX0\" style=\"color: #3366ff;\" href=\"https:\/\/legendfusions.com\/usa\/how-do-you-calculate-taxes-from-payroll\/\" target=\"_blank\" rel=\"noreferrer noopener\"><span class=\"TextRun Underlined SCXW19418820 BCX0\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"none\"><span class=\"NormalTextRun SCXW19418820 BCX0\" data-ccp-charstyle=\"Hyperlink\">payroll taxes<\/span><\/span><\/a><\/span><span class=\"TextRun SCXW19418820 BCX0\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"none\"><span class=\"NormalTextRun SCXW19418820 BCX0\">), and any remaining profits distributed to you are <\/span><span class=\"NormalTextRun SCXW19418820 BCX0\">generally not<\/span><span class=\"NormalTextRun SCXW19418820 BCX0\"> subject to self-employment tax.\u00a0<\/span><\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-42f6711 elementor-widget elementor-widget-text-editor\" data-id=\"42f6711\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><span class=\"TextRun SCXW220280972 BCX0\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"none\"><span class=\"NormalTextRun SCXW220280972 BCX0\">There are additional administrative costs and complexity, however, so be sure to <\/span><\/span><span style=\"color: #3366ff;\"><a class=\"Hyperlink SCXW220280972 BCX0\" style=\"color: #3366ff;\" href=\"https:\/\/legendfusions.com\/usa\/services\/incorporation-services\/\" target=\"_blank\" rel=\"noreferrer noopener\"><span class=\"TextRun Underlined SCXW220280972 BCX0\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"none\"><span class=\"NormalTextRun SCXW220280972 BCX0\" data-ccp-charstyle=\"Hyperlink\">consult a tax professional<\/span><\/span><\/a><\/span><span class=\"TextRun SCXW220280972 BCX0\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"none\"><span class=\"NormalTextRun SCXW220280972 BCX0\"> before making a decision.\u00a0<\/span><\/span><span class=\"EOP SCXW220280972 BCX0\" data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:278}\">\u00a0<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-53f9c47 elementor-widget elementor-widget-pbmit_custom_heading\" data-id=\"53f9c47\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"pbmit_custom_heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t<div class=\"pbmit-custom-heading \"><h3 class=\"pbmit-element-title\">\r\n\t\t\t\r\n\t\t\t\tEarned Income Credit \r\n\t\t\t\r\n\t\t\t<\/h3>\r\n\t\t<\/div>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-cfe49cb elementor-widget elementor-widget-text-editor\" data-id=\"cfe49cb\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><span class=\"TextRun SCXW73802821 BCX0\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"none\"><span class=\"NormalTextRun SCXW73802821 BCX0\">The <\/span><\/span><span class=\"TextRun MacChromeBold SCXW73802821 BCX0\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"none\"><span class=\"NormalTextRun SCXW73802821 BCX0\">earned income credit<\/span><\/span><span class=\"TextRun SCXW73802821 BCX0\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"none\"><span class=\"NormalTextRun SCXW73802821 BCX0\"> (EIC) does not directly reduce your self-employment tax, but if you qualify, this could reduce your overall tax bill or result in a refund. The EIC is a refundable tax credit for low to moderate-income working individuals and families, which you may usually qualify for if self-employment <\/span><span class=\"NormalTextRun SCXW73802821 BCX0\">is<\/span> <span class=\"NormalTextRun SCXW73802821 BCX0\">your main source of income.<\/span><\/span><span class=\"EOP SCXW73802821 BCX0\" data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:278}\">\u00a0<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-268e706 elementor-widget elementor-widget-pbmit_custom_heading\" data-id=\"268e706\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"pbmit_custom_heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t<div class=\"pbmit-custom-heading \"><h2 class=\"pbmit-element-title\">\r\n\t\t\t\r\n\t\t\t\tSeek Professional Tax Advice \r\n\t\t\t\r\n\t\t\t<\/h2>\r\n\t\t<\/div>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-13ce5c1 elementor-widget elementor-widget-text-editor\" data-id=\"13ce5c1\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><span class=\"TextRun SCXW11447285 BCX0\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"none\"><span class=\"NormalTextRun SCXW11447285 BCX0\">Being self-employed offers incredible freedom and opportunity, but it also places the responsibility of tax compliance squarely on your shoulders. If you need personalized <\/span><\/span><span class=\"TextRun MacChromeBold SCXW11447285 BCX0\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"none\"><span class=\"NormalTextRun ContextualSpellingAndGrammarErrorV2Themed SCXW11447285 BCX0\">self employment<\/span><span class=\"NormalTextRun SCXW11447285 BCX0\"> tax instructions<\/span><\/span><span class=\"TextRun SCXW11447285 BCX0\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"none\"><span class=\"NormalTextRun SCXW11447285 BCX0\">, Legend Fusions <\/span><span class=\"NormalTextRun SCXW11447285 BCX0\">is here to offer <\/span><span class=\"NormalTextRun SCXW11447285 BCX0\">you<\/span><span class=\"NormalTextRun SCXW11447285 BCX0\"> comprehensive advice. <\/span><\/span><span style=\"color: #3366ff;\"><a class=\"Hyperlink SCXW11447285 BCX0\" style=\"color: #3366ff;\" href=\"https:\/\/legendfusions.com\/usa\/contact-us\/\" target=\"_blank\" rel=\"noreferrer noopener\"><span class=\"TextRun Underlined SCXW11447285 BCX0\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"none\"><span class=\"NormalTextRun SCXW11447285 BCX0\" data-ccp-charstyle=\"Hyperlink\">Talk to our tax advisor today<\/span><\/span><\/a><\/span><span class=\"TextRun SCXW11447285 BCX0\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"none\"><span class=\"NormalTextRun SCXW11447285 BCX0\">!<\/span><\/span><span class=\"EOP SCXW11447285 BCX0\" data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:278}\">\u00a0<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-8a3e643 elementor-widget elementor-widget-pbmit_custom_heading\" data-id=\"8a3e643\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"pbmit_custom_heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t<div class=\"pbmit-custom-heading \"><h4 class=\"pbmit-element-title\">\r\n\t\t\t\r\n\t\t\t\tReviewed by:\r\n\t\t\t\r\n\t\t\t<\/h4>\r\n\t\t<\/div>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<section class=\"elementor-section elementor-inner-section elementor-element elementor-element-2d138c1 pbmit-col-stretched-none pbmit-cursor-color-blackish-color pbmit-bg-color-over-image elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"2d138c1\" data-element_type=\"section\" data-e-type=\"section\" data-settings=\"{&quot;background_background&quot;:&quot;classic&quot;}\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-inner-column elementor-element elementor-element-c189860 pbmit-bg-color-over-image\" data-id=\"c189860\" data-element_type=\"column\" data-e-type=\"column\" data-settings=\"{&quot;background_background&quot;:&quot;classic&quot;}\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-af9f5c8 elementor-position-left elementor-position-top elementor-vertical-align-top elementor-widget elementor-widget-image-box\" data-id=\"af9f5c8\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"image-box.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<div class=\"elementor-image-box-wrapper\"><figure class=\"elementor-image-box-img\"><img decoding=\"async\" width=\"512\" height=\"512\" src=\"https:\/\/legendfusions.com\/usa\/wp-content\/uploads\/2024\/10\/Hira.webp\" class=\"attachment-full size-full wp-image-2443\" alt=\"Hira\" srcset=\"https:\/\/legendfusions.com\/usa\/wp-content\/uploads\/2024\/10\/Hira.webp 512w, https:\/\/legendfusions.com\/usa\/wp-content\/uploads\/2024\/10\/Hira-300x300.webp 300w, https:\/\/legendfusions.com\/usa\/wp-content\/uploads\/2024\/10\/Hira-150x150.webp 150w\" sizes=\"(max-width: 512px) 100vw, 512px\" \/><\/figure><div class=\"elementor-image-box-content\"><h4 class=\"elementor-image-box-title\">Hira Asif<\/h4><p class=\"elementor-image-box-description\">Hira Asif, Client Manager (US) at Legend Fusions, brings over 11 years of tax expertise, including 8 years with Ernst &amp; Young. Her work focuses on tax advisory, compliance, and planning for individuals, partnerships, and private equity funds. With a deep knowledge of federal, state, and local tax regulations, Hira is skilled in identifying tax planning opportunities and reviewing corporate and partnership tax returns to optimize compliance and reduce exposures.<\/p><\/div><\/div>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-bd3409a elementor-widget__width-initial elementor-shape-rounded elementor-grid-0 e-grid-align-center elementor-widget elementor-widget-social-icons\" data-id=\"bd3409a\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"social-icons.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t<div class=\"elementor-social-icons-wrapper elementor-grid\">\n\t\t\t\t\t\t\t<span class=\"elementor-grid-item\">\n\t\t\t\t\t<a class=\"elementor-icon elementor-social-icon elementor-social-icon-linkedin elementor-repeater-item-2e23a96\" href=\"https:\/\/www.linkedin.com\/in\/hira-asif-1a08a81a1\/\" target=\"_blank\" rel=\"noopener\">\n\t\t\t\t\t\t<span class=\"elementor-screen-only\">Linkedin<\/span>\n\t\t\t\t\t\t<i aria-hidden=\"true\" class=\"fab fa-linkedin\"><\/i>\t\t\t\t\t<\/a>\n\t\t\t\t<\/span>\n\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"<p>Earning money on your own terms initially feels freeing, until you have to deal with taxes. Unlike employees who are subject to payroll taxes, you are responsible for your taxes when you are self-employed.\u00a0 Many new freelancers, contractors, and small business owners often overlook this aspect, usually because simply thinking about it feels burdensome. It\u2019s [&hellip;]<\/p>\n","protected":false},"author":7,"featured_media":3886,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[44],"tags":[],"class_list":["post-3857","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-guide"],"_links":{"self":[{"href":"https:\/\/legendfusions.com\/usa\/wp-json\/wp\/v2\/posts\/3857","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/legendfusions.com\/usa\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/legendfusions.com\/usa\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/legendfusions.com\/usa\/wp-json\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/legendfusions.com\/usa\/wp-json\/wp\/v2\/comments?post=3857"}],"version-history":[{"count":47,"href":"https:\/\/legendfusions.com\/usa\/wp-json\/wp\/v2\/posts\/3857\/revisions"}],"predecessor-version":[{"id":5952,"href":"https:\/\/legendfusions.com\/usa\/wp-json\/wp\/v2\/posts\/3857\/revisions\/5952"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/legendfusions.com\/usa\/wp-json\/wp\/v2\/media\/3886"}],"wp:attachment":[{"href":"https:\/\/legendfusions.com\/usa\/wp-json\/wp\/v2\/media?parent=3857"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/legendfusions.com\/usa\/wp-json\/wp\/v2\/categories?post=3857"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/legendfusions.com\/usa\/wp-json\/wp\/v2\/tags?post=3857"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}