Does a contractor pay Social Security and medicaid apart from state and federal income taxes?

Question

Or is it all part of your SE income tax?

'm clueless and new to this stuff.

Answer 1

"SE income tax" are two different things.  "SE tax" means self-employment tax which means employee half + employer half of both Soc Sec tax and Medicare tax.  A total of 15.4%.  "Income Tax" is what you are used to seeing on your paychecks as an employee under "Federal Withholding" and it is the reason for filing a tax return at the end of the year.

Now that you are a contractor, or self-employed, you have to get your money to the IRS yourself since you don't have somebody withholding for you.  You do that by estimating your taxes for the year, including both income tax and SE tax, and paying 1/4 of it each quarter.  Go to irs.gov and download Form 1040-ES for the vouchers to send in and the instructions for all of this.  Your year-end tax return will compute both income tax and SE tax and make sure you have paid enough or refund some if you have over paid the total of the two.