Self Employment Tax Rate 2017

The 2017 18 tax year in the uk runs from 6th april 2017 to 5th april 2018.

Self employment tax rate 2017. 2017 18 tax rates for self employed in the uk tax continue reading uk self employed tax rates 2017 18 at a glance. 2 9 on any net self employment income above 127 200. Social security and medicare taxes of most wage earners are figured by their employers. For example let s say that you earn a profit of 130 000 from self employment in 2017 and you had no other income.

The law sets the self employment tax rate as a percentage of your net earnings from self employment. The irs states that the self employment tax 2019 rate is 15 3 percent on the first 132 900 of net income plus 2 9 percent on the net income in excess of 132 900. The self employment tax rate is 15 3. Your employment wages and tips should have a 6 2 deduction for social security from your pay and an additional 6 2 payment from your employer that does not appear on your paycheck.

This rate consists of 12 4 for social security and 2 9 for medicare taxes. If you are self employed your social security tax rate is 12 4 percent and your medicare tax is 2 9 percent on those same amounts of earnings but you are able to deduct the employer portion. Here s how self employment taxes work. See the table and example for tax rates income limits for social security taxes and how to calculate what you owe in the 2016 or 2017 tax years.

Also you can deduct the employer equivalent portion of your se tax in figuring your adjusted gross income. Multiplying this amount by 92 35 gives net self employment income of 120 055. So the self employment tax structure for 2017 is. In 2017 income up to 118 500 is subject to the 12 4 tax paid for the social security portion of self employment taxes fica.

Wage earners cannot deduct social security and medicare taxes. Here are some of the most common at a glance figures you might need for this tax year. 15 3 on the first 127 200 in net self employment income. You will pay an additional 0 9 medicare tax on the amount that your annual income exceeds 200 000 for single filers 250 000 for married filing jointly and 125 000 married filing separate.

Additional medicare tax applies to self employment income above a threshold. Self employment tax is the equivalent of payroll taxes paid by employees and is due on income earned by sole proprietors freelancers and independent contractors. Tax returns for this tax year are generally due by 31st january 2019.