What this line means
Add lines 9 and 10. This is your total self-employment tax — the combined Social Security (12.4%) and Medicare (2.9%) taxes on your net SE earnings. This amount goes on Schedule 2, line 4. The maximum effective rate is 15.3% on earnings up to the Social Security wage base, dropping to 2.9% on earnings above the cap. For a sole proprietor with $100,000 in net earnings, the SE tax is roughly $14,130.
Does this apply to you?
- You completed lines 9 and 10 and have a Social Security and Medicare tax amount to combine
- You owe self-employment tax and need to carry it to Schedule 2
- You are calculating the deductible half of SE tax for Schedule 1
Easy to overlook
SE tax is in addition to income tax, not instead of it First-time self-employed filers are often shocked that SE tax is a separate tax on top of federal income tax. On $80,000 of net SE earnings, the SE tax is roughly $11,300 — and that is before any income tax. Combined with a 22% marginal income tax rate, the total federal tax burden on SE income approaches 37%. Quarterly estimated payments (Form 1040-ES) must account for both taxes. 1 IRS Schedule SE instructions — Line 11
This total does not include the Additional Medicare Tax Line 11 covers the base 15.3% SE tax rate. High earners who owe the 0.9% Additional Medicare Tax (calculated on Form 8959) have an additional liability that goes on Schedule 2, line 23 — a different line than the base SE tax. The total SE-related tax burden for a high-earning self-employed individual is the sum of line 11 and the Form 8959 amount. 2 General filing pattern — SE tax not entered on Schedule 2
Watch out for this
Entering line 11 on the wrong line of Schedule 2. Self-employment tax goes on Schedule 2, line 4 — not line 6 (additional tax on early distributions), not line 17 (other taxes), and not directly on Form 1040. Misplacing the SE tax on Schedule 2 causes the total tax calculation on Form 1040 to be wrong.
Footnotes
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IRS Schedule SE (Form 1040) Instructions, Line 11. https://www.irs.gov/instructions/i1040sse ↩
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IRS Schedule 2 (Form 1040) Instructions, Line 4. https://www.irs.gov/instructions/i1040s2 ↩