Use this calculator to estimate your self-employment taxes for 2011. Normally these taxes are withheld by your employer. However, if you are self-employed, operate a farm or are a church employee you may owe self-employment taxes. This calculator uses 2011 tax tables and should not be used for estimating 2010 self-employment taxes.
(Please note that the 2011 self-employment tax is 10.4% for the FICA portion and 2.9% Medicare. The FICA rate was reduced from 12.4% for one year as part of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010. The FICA portion of the self-employment tax will return to 12.4% in 2012.)
- Net farm income or loss
- This is your net farm income or loss. This should include both the net farm profit or loss from Schedule F along with any income from farm partnerships. Please note that if your gross farm income is $2,400 or less and your net farm income is $1,733 or less there is a "Farm Optional Method" for calculating income subject to self-employment taxes. If you qualify for this optional method it may produce a slightly lower income subject to self-employment taxes. This calculator assumes that you will not use the "Farm Optional Method". For more information see IRS Schedule SE Part II, Optional Methods to Figure Net Earnings.
- Net business income or loss
- This is your net income from businesses and partnerships. These amounts are reported on IRS Schedule C for sole proprietorships and IRS Schedule K-1 for partnerships. Do not include any farm partnerships; this income should be included in the net farm income or loss.
In most cases you will need to pay self-employment taxes on salaries received for services performed as a minister. This also includes the rental value of a home and the value of meals and lodging provided to you, your spouse and your family. Include income received for services performed as a minister in your "net business income or loss", do not include it in "Church employee income". There are a number of exceptions for ministers and members of religious orders, in regards to self-employment tax liability. Please see the detailed instructions for self-employment taxes as provided by the IRS to determine how these rules might apply to your specific situation.
- Self-employment income
- This is your total income subject to self-employment taxes. This is calculated by taking your total "net farm income or loss" and "net business income or loss" and multiplying it by 92.35%. This is done to adjust your net income downward by the total employment tax that would have been paid by an employer, had you not been self-employed. If the result is less than $400.00, you do not owe any self-employment tax on this income.
- Church employee income
- If you have more than $108.28 in church employee income, you will need to pay self-employment taxes on that income. This does not include any income you received as a minister, which was entered above.
- Net church employee income
- This is your total church income subject to self-employment taxes. Like your other self-employment income, this total is calculated by multiplying your church employee income by 92.35%. If this amount is less than $100, you do not owe any self-employment taxes on this income.
- Employer paid income
- Enter your total employment wages and tips that you have been paid where social security taxes have been deducted. In 2011, income up to $106,800 is subject to the 10.4% tax paid for the Social Security portion of self-employment taxes (FICA). Your employment wages and tips should have a 4.2% deduction for Social Security from your pay, and an additional 6.2% payment from your employer that does not appear on your paycheck. If your total wages, tips and self-employment income exceed $106,800 you only owe social security on the difference between your self-employment income and $106,800. If your total employment wages and tips exceed $106,800 in 2011 you will not owe any additional FICA taxes for the year.