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What is Self-Employment Tax and is this in addition to other taxes I pay as a small business owner at the end of the year?

Self-Employment Tax
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Gary Carter, PhD, MT, CPA
Self-Employment tax is Social Security and Medicare tax for self-employed individuals. The rate is 13.3% of your self-employment net income for 2012 (10.4% for Social Security tax and 2.9% for Medicare tax). Beginning in 2013 the rate for Social Security tax will increase by 2%, so the combined rate will be 15.3%. Your self-employment net income is the net income shown on Schedule C of your Form 1040, not your taxable income. Therefore, you could have zero taxable income but still owe self-employment tax. For example, let's say your net income on Schedule C is $27,000 in 2012, and you are married filing jointly with two dependent children. Your taxable income is zero after your 4 exemptions and the standard deduction ($27,000 - ($3,800 x 4) - $11,900), but you will owe $3,591 in Self-Employment tax.
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