![]() Typically, you’ll first fill out a Schedule C form for your independent business to calculate your total profit (earnings - expenses = profit). In order to find out how much this actually works out to be in taxes you owe, you’ll need to fill out a Schedule SE when you file your year-end taxes. Medicare: You will pay taxes of 2.9 percent on your business profit. ![]() Social Security: You will pay taxes of 12.4 percent on up to $142,800 of your business profit. There are two parts of the self-employment tax. Because you don’t have an employer paying these taxes for you, it is your responsibility to calculate and pay them. When you’re self-employed, you are required to pay taxes on your income that are the equivalent of what an employer typically pays on behalf of employees for taxes. Why Do I Have to Pay the Self-Employment Tax? A question our tax team here at Stride regularly receives is “What is self-employment tax?” Today we are going to answer that question for our members.
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