Welcome Guest. Register Now!  



Reply
 
LinkBack Thread Tools Search this Thread Display Modes
  #1 (permalink)  
Old 03-10-2008, 11:31 PM
Junior Member
 
Join Date: Jan 2007
Posts: 7
What is the Self-Employment Tax rate for self-employed businesses?

What is the tax rate that is assessed on self-employed individuals in 2008? Is this a flat rate or a graduated rate? Thank you!



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
  #2 (permalink)  
Old 03-11-2008, 11:37 AM
TaxGuru's Avatar
Tax Guru
 
Join Date: Jan 2007
Location: New Jersey, USA
Posts: 2,417
Blog Entries: 3
What is the Self-Employment Tax rate for self-employed businesses?

For Tax Year 2007
Your Self-Employment Tax, known commonly as the S/E Tax is currently at 15.3%. There are 2 components making up this tax rate.

The first one is the Social Security Taxes or FICA that is imposed on the first $97,500 at 12.4%. For net income above 97,500 the income is not subject to S/E Taxes.

The second component is the Medicare taxes and there is no income limit on this amount. The tax rate here is 2.9% on the Net Self-Employment Income.

Thus, for taxpayers whose net self-employment income is less than 97,500, the effective S/E tax is at 15.30%. Remember, all this income is also subject to the regular tax rate.

The taxpayers is allowed a 50% deduction of S/E tax liability, and this deduction is taken as an adjustment to income without any limitations.

__________________
Find a CPA near you!

Ask TaxGuru Please refer to the legal disclaimer.


Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
Ads
Reply



Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

vB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Self Employment Tax Majid Sole-Proprietorship 2 03-23-2015 04:21 AM
Are Gambling Winning Subject to Self Employment taxes? Tanya Miscellaneous 1 12-03-2007 10:10 AM
New Jersey Minimum S Corporation Tax Rate Leah S-Corporation 0 02-16-2007 08:47 AM
Tax savings strategy for self-employed IT consultant awkan Sole-Proprietorship 1 01-31-2007 01:44 AM
Can I take a payroll from my Self Employed Business Tertard Sole-Proprietorship 1 01-24-2007 02:00 AM

Follow us on Facebook Follow us on Twitter Google Buzz Rss Feeds

» Categories
 
Individual
 » Income
 » IRA/Sep
 » Medical
 
Corporations
 » Payroll
 
Forum for CPAs
 
Financial Planning
 
 
 

» Recent Tax Q&A
No Threads to Display.