Need help with self-emplyment tax info?

Question

How do people who are self-employed pay into Social Security and Medicare? I know that there is the 1040-ES form that you send in quarterly, but I see nothing on them where you can apply any of it to Social Security and Medicare. Also, does each state have their own form of estimated quarterly payments?

Answer 1

When you do your tax return - it breaks down what money you owe for self-employment taxes (which is Social security and Medicare), and which is income taxes.

The money you pay in with the 1040-ES goes gets credited to your name, and is only applied to particular taxes when you send in the return.  The estimated taxes are just estimates - until you do your tax return at the end of the year - they won't know how much you owe of each.

And yes - if your state has an income tax - they will take quarterly payments too.  Depending on your state - it may be a fraction of what the federal estimated payments are.  And generally, if it's going to be $300 or less, you can usually opt to pay it once a year - with your state tax return.  If it's more than that - I'd definitely make payments to the state during the year.

Answer 2

Read more about self employed tax filing:

http://taxipay.blogspot.com/2008/04/tax-...

Answer 3

You will file a schedule SE to calculate your self-employment tax (for ss and medicare) with your 1040 at the end of the year.  The amount you send in quarterly should include the approximately 14% of your net se income.