self-employment tax


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Self-employment tax

A tax self-employed people must pay to qualify them to receive Social Security benefits at retirement.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

self-employment tax

A federal tax similar to the Social Security and Medicare taxes deducted and matched by employers. It is equal to 15.3 percent of net earnings from self-employment and must be calculated on Schedule SE and reported on Form 1040. Real estate agents, brokers, mortgage  brokers, and all other self-employed individuals are required to pay self-employment taxes. (See Tax Topic 554, “Self-Employment Tax” and Publication 334, “Tax Guide for Small Business,” at the IRS Web site, www.irs.gov.)

The Complete Real Estate Encyclopedia by Denise L. Evans, JD & O. William Evans, JD. Copyright © 2007 by The McGraw-Hill Companies, Inc.
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