The IRS’s Self Employment Tax is basically a nickname for Social Security and Medicare taxes.  If you work for yourself, you still have to pay in to the Federal Social Security and Medicare systems for the elderly.   Workers who work for someone else have these taxes taken out of their paychecks automatically.

Can I Deduct the Self Employment Tax?

Yes and no.  You can deduct half the amount paid for self employment taxes but only half.  This will help to reduce your adjusted gross income so you pay less taxes.

What is the 2011 Self Employment Tax Rate?

Good news!  The 2011 Self Employment tax rate was reduced by the IRS.  It went down by 2%.  So, for 2011 the Self Employment Tax rate was 13.3%, down from 15.3% in 2010.  Thanks to the 2010 Tax Relief Act, the self employment tax rate is now lower.

Do I Have to Pay Self Employment Tax?

If you have your own business and you make more than $400 in a tax year then yes, you have to pay the self employment tax.

If you worked for a church and made $108.28 or more you will have to pay self employment tax.