1. What is Self-Employment FICA Tax?

The Self-Employment FICA Tax is the self-employed individual's contribution to Social Security and Medicare, equivalent to the combined employer and employee portions of FICA taxes for regular employees (15.3% total).

2. How Does the Calculator Work?

The calculator uses the simple formula:

Where:

• \( Income \) — Your net earnings from self-employment
• \( 0.153 \) — The combined Social Security (12.4%) and Medicare (2.9%) tax rate

Explanation: Self-employed individuals pay both the employer and employee portions of FICA taxes, resulting in the 15.3% rate.

3. Importance of FICA Tax Calculation

Details: Accurate FICA tax estimation is crucial for quarterly tax payments, financial planning, and avoiding underpayment penalties.

4. Using the Calculator

Tips: Enter your net self-employment income in USD. The calculator will compute your total FICA tax obligation at the standard 15.3% rate.

5. Frequently Asked Questions (FAQ)

Q1: Is the 15.3% rate always applicable?
A: For 2023, the 15.3% rate applies to the first $160,200 of income. Income above that threshold is only subject to the 2.9% Medicare portion.

Q2: Can I deduct half of my SE tax?
A: Yes, you can deduct the employer-equivalent portion (7.65%) when calculating your adjusted gross income.

Q3: When are SE taxes due?
A: Typically paid quarterly (April, June, September, and January) along with estimated income taxes.

Q4: Are there any exceptions?
A: Certain religious groups and nonresident aliens may be exempt. Ministers have special rules.

Q5: What about Additional Medicare Tax?
A: An additional 0.9% Medicare tax may apply to income over $200,000 (single) or $250,000 (married filing jointly).