DiSabatino CPA Blog

DiSabatino CPA Blog

A blog by Michael DiSabatino CPA with topics on Tax Savings, Business, Management and more...

Who owes self-employment tax?

Who owes self-employment tax?

If you earned $400 or more of net profit during 2013 from work as a sole proprietor or independent contractor, you may owe self-employment tax. That's true no matter what your age - even if you're receiving social security benefits.

The tax is assessed on your net earnings from self-employment, which can include income from qualified joint ventures and partnerships, as well as fees you earn working as a director for a corporation. In this context, "earnings" generally means your income after deducting expenses incurred while operating your business. If you have multiple businesses, you combine the net income and losses.

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