How Do You Pay Self Employment Tax?
• Add up your business revenue. This is any money taken in by your business. Make a note of this amount. • Figure out the total amount of your business related expenses. You will have to report these on a form titled Schedule C. This is any money used to run your business. If you are unsure of what expenses are business-related, contact an accountant or check the IRS website. • Subtract the total amount you figured for business related expenses from the total amount of business revenue. The resulting figure is your net earnings figure. Multiply your net earnings figure by 92.35 percent. The resulting figure is your taxable earnings amount, or the amount on which you are to pay taxes. • Check the IRS website for current rates of self employed income. It is very important to calculate the precise amount as you wouldn’t want any unpleasant surprises later. • Pay attention to the income limits for the self employment taxes. As of the 2008 tax year, if you earned $102,000 or less for the ye
