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Self-Employment Tax Expense
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- Owners of businesses organized other than as a corporation
are not employees of their businesses. As such, they are
personally responsible for paying Social Security and Medicare
taxes (called "Self-employment tax.")
- Owners of unincorporated businesses pay self-employment
tax on NET earnings from self-employment.
- ½ of Self Employment tax is deductible as an adjustment
to gross income on your personal tax returns.
For tax purposes, self-employment tax is computed on Form
SE and is recorded on Schedule C and Form 1040.
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