How to calculate self-employment taxes

Self-Employment Tax Calculator Key Terms

Net farm income or loss

This represents net income or loss from farming activities, including profit or loss reported on Schedule F and any income from farming partnerships.

Net business income or loss

This is the net income of businesses and partnerships, reported on IRS Schedule C for sole proprietorships and Schedule K-1 for partnerships. Exclude farm partnership income because it should be included in net farm income or loss.

Income of Church Employees

If your church employee’s income exceeds $108.28, self-employment taxes apply. This excludes income received as a minister, which must be reported separately.

Income paid by employer

Enter the total wages and tips with Social Security deductions. In 2023, income up to $160,200 is subject to the 12.4% Social Security tax for self-employment. If total wages exceed $160,200, no additional Social Security taxes are due for the year.

Net income of church employees

This is the total church income subject to self-employment taxes. It is calculated by multiplying the income of church employees by 92.35%. If the amount is less than $100, no self-employment tax is due on that income.

Self-employment income

This is the total income subject to self-employment tax. It is calculated by multiplying net farm income or loss and net business income or loss by 92.35%. If the result is less than $400, no self-employment tax is due on that income.

What are self-employment taxes?

Self-employment taxes are designed to allow self-employed workers to pay into Social Security and Medicare. While employees normally have these taxes automatically withheld from their paychecks, self-employed individuals are responsible for estimating and paying their tax obligations each quarter.

What are the tax deductions for the self-employed?

Self-employed individuals can claim a number of small business deductions to reduce their tax obligations. These include the home office deduction, business vehicles, health insurance premiums, retirement contributions, professional fees, education and advertising. Business travel, meals and entertainment are also tax deductible. Be sure to consult a tax professional for a more accurate assessment of your eligibility for certain deductions.