How to File Self-Employed Income Tax

Self-employed individuals pay Social Security and Medicare through a self-employment tax.

Self-employment tax is the Social Security and Medicare tax that individuals who are self-employed pay. Self-employed individuals calculate this tax using Form 1040, Schedule SE and pay it in quarterly installments with the individual's estimated taxes. According to the IRS, you need to pay self-employment taxes if you have net earnings greater than $400 or you are a church employee with income greater than $108.28.

Things You'll Need

• Schedule SE (Form 1040), Self-Employment Tax
• Form 1040-ES, Estimated Tax for Individuals

Instructions

1. Calculate your self-employment tax amount using Schedule SE (Form 1040), Self-Employment Tax. Use the flowchart provided on the form to determine whether you should use the long schedule SE or the short schedule SE. For both schedules, you will need to know your net earnings. Follow the instructions on the form to calculate your self-employment tax.

2. Fill out Form 1040-ES, Estimated Tax for Individuals. Enter your self-employment tax from Schedule SE onto line 11 of the 1040-ES form. Calculate your estimated taxes. Your estimated tax amount will include your self-employment tax.

3. Pay your estimated taxes by mail. Submit the payment voucher included in the Form 1040-ES booklet and payment via mail to the address provided on the form. Make your check or money order payable to the United States Treasury.

4. Pay your estimated taxes using Electronic Federal Tax Payment System. Register for EFTPS on their website and pay using your checking account. EFTPS is available online or by phone. You can schedule one-time or recurring payments using EFTPS.

5. Pay by credit or debit card using one of the authorized service providers. The current authorized service provider information is available on the 1040-ES form. You can pay via their website or by telephone. There will be a convenience charge depending on the service provider that you chose to utilize.

6. Pay by electronic funds withdrawal. Individuals who electronically file their return can schedule their quarterly payments using electronic funds withdrawal. You can schedule only one payment or schedule any or all of the payments.

References

• IRS: Self-Employment Tax

Resources

• IRS: 2009 Instructions for Schedule SE (Form 1040)
• IRS: Schedule SE (Form 1040) Self-Employment Tax
• IRS: Form 1040-ES, Estimated Tax for Individuals