Do You Have to Pay the Self Employment Tax?

Posted by KC Morgan Jul 21, 2009

Do you have to pay the self employment tax? What is the self employment tax? Even professionals who don’t own their own businesses or earn their money through paying clients may be subject this required annual fee. Whether you consider yourself technically self employed or not, you should learn if you’re liable to pay a special tax on your yearly earnings.

The Self Employment Tax

So, who does have to pay the self employment tax? In the United States, the rules are pretty clear. Answer the following series of questions to find out whether or not you’re liable for this tax burden:

• Do you own and/or operate any kind of business?
• Are you in a partnership that owns or operates any kind of business?
• Do you earn money as an independent contractor?
• Do you earn money as a church employee?
• In any way have you made money through a Web site, online or as part of any job that could be construed as self employment?

If you answered yes to any of these questions, then yes you must pay the self employment tax. This tax is 15.3% of your total self employment earnings, provided you’ve earned more than $400 in the calendar year. If you are a church employee and earned more than $108.28 in a single year, you must pay a self employment tax on this income.

Keep track of all self employed earnings that are subject to this tax, and keep records of all business-related expenses. Remember that these expenses can be claimed to help alleviate some of that tax burden, reducing the amount you’ll be required to pay.