What is self-employment tax, and how do I calculate it?

When you’re self-employed, you’re required to pay taxes on your income that are the equivalent of what an employer typically pays in Social Security and Medicare taxes.

Self-employment taxes are calculated on your net business profit (i.e. your business income minus business deductions). Usually, an employer will pay these taxes on your behalf, but as a business owner, you are now responsible for paying them.

If you’re using filing software, your self-employment tax will be automatically calculated for you when you report your business income. If you’re filing forms by hand, you can calculate your self-employment tax using Schedule SE. You can read more about Schedule SE and calculating your tax here.

If needed, the IRS has their instructions for filling out the Schedule SE on their website here: About Schedule SE (Form 1040), Self-Employment Tax

The Stride app can help you record your work-related mileage and business expenses. It will put all the data you enter into an IRS-ready tax report format and you can then use this report when you file your taxes in order to claim your business expenses.