Self-Employment Tax Rate for 2012

What is Self-Employment Tax?

Self-employment tax is a tax consisting of Social Security and Medicare taxes primarily for individuals who work for themselves. It is similar to the Social Security and Medicare taxes withheld from the pay of most employees. When you are self employed, you pay the social security and medicare “matching amounts” that an employer would pay. This is the “self employment tax”.

If you are self-employment, use Form 1040-ES to calculate your taxes.  You can deduct the employer-equivalent portion your SE tax in figuring your adjusted gross income. Wage earners cannot deduct Social Security and Medicare taxes.

When is Self-Employment Tax due?

First Payment Due: April 17, 2012

Second Payment Due: June 15, 2012

Third Payment Due: September 17, 2012

Forth Payment Due: January 15, 2013

You can download IRS tax due dates from their website.

2012 Self-Employment Tax Rate

The 2010 Tax Relief Act reduced the self-employment tax by 2% for self-employment income earned in calendar year 2011. The self-employment tax rate for self-employment income earned in calendar year 2011 is 13.3% (10.4% for Social Security and 2.9% for Medicare).  The Temporary Payroll Tax Cut Continuation Act of 2011 extended this self-employment tax reduction of 2% for calendar year 2012.

Who Must Pay Self-Employment Tax?

You must pay self-employment tax and file Schedule SE (Form 1040) if either of the following applies.

  • Your net earnings from self-employment (excluding church employee income) were $400 or more.
  • You had church employee income of $108.28 or more.


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