Per Diem Rates from the U.S. General Services Administration
Search by city, state or ZIP code, or by clicking on the map. You can also use the new per diem tool to calculate trip allowances
Rates are set by fiscal year, effective October 1 each year. Find current rates in the continental United States ("CONUS Rates").
What is Self-Employment Tax?
Self-employment tax consists of both social security tax and Medicare tax. Sole proprietors and partners in a partnership are considered self-employed, and therefore, are subject to self-employment tax. Self-employment tax is figured on Schedule SE.
Figuring Your Self-Employment tax
In figuring your self-employment tax do not reduce net earnings by your deductible contributions to your own SEP or Keogh plan or your self-employed health insurance deduction.
You'll notice on Schedule SE, Part 1, line 4a, there is a decimal of .9235 listed (100% - 7.65% = 92.35% or .9235). Multiply net profit on Schedule C, Line 31 by .9235 to determine the amount subject to self-employment tax (net earnings from self-employment).
If the amount of Schedule SE, Line 4c is less than $400, you don't owe self-employment tax. There is an exception for church employee income (see Schedule SE instructions).
If you had a job and self-employment income, you need to take into account your wages from your job when figuring maximum earnings subject to the social security portion of the self-employment tax.
More Than One Business
Only one Schedule SE is required to be filed, regardless of the number of Schedule Cs you file.
For example, if you had three businesses and filed three Schedule Cs, one with a net profit of $15,000, one with a net profit of $5,000 and one with a net loss of $2,000, you would file, three Schedule Cs and one Schedule SE.
The combined net income for the three Schedule Cs is $18,000 ($15,000 + $5,000 - $2,000). The amount subject to self-employment tax is $16,623 (.9235 x $18,000)
Paying Self-Employment Tax
If you make estimated tax payment, self-employment taxes are included those payments, along with your estimated federal income tax payments.
Quarterly Installments Due Dates:
| Payment Period | Due Date |
|---|---|
| January 1 - March 31 | April 15 |
| April 1 - May 31 | June 15 |
| June 1 - August 31 | September 15 |
| September 1 - December 31 | January 15 of the following year. |
| Fiscal Year taxpayers | If your tax year doesn't begin on January 1, see the special rules for fiscal year taxpayers in Chapter 2 of Publication 505 |
| Farmers and Fishermen | See Chapter 2 of Publication 505 |
Additional Medicare Tax 0.9% for High Income Earners
High income earners are subject to an additional .9% (.009) Medicare tax. The Additional Medicare Tax applies to Medicare wages, Railroad Retirement Tax Act (RRTA) compensation, and self-employment income above a threshold amount (see the chart below).
Medicare Wages and Self-employment Income
Medicare wages and self-employment income are combined to determine if your income exceeds the threshold. A self-employment loss should not be considered for purposes of this tax. RRTA compensation should be separately compared to the threshold.
If You Receive W-2 Wages:
Your employer is responsible for withholding the 0.9% Additional Medicare Tax on your Medicare wages or RRTA compensation paid in excess of $200,000 in a calendar year.
Your employer is required to begin withholding Additional Medicare Tax in the pay period in which your wages or compensation for the year exceed $200,000 and continue to withhold it in each pay period for the remainder of the calendar year.
Threshold Amounts for Additional Medicare Tax
Note: The threshold amounts below are not indexed for inflation:
| Filing Status | Threshold Amount |
|---|---|
| Married filing jointly | $250.000 |
| Married filing separately | $125,000 |
| Single | $200,000 |
| Head of Household | $200,000 |
| Qualifying widow(er) | $200,000 |
The additional .9% won't qualify for a deduction on Form 1040 (the above-the-line deduction for self-employment tax). The additional .9% Medicare tax must be taken into account for estimated tax purposes.
The regular Medicare tax rate for lower income taxpayers remains 2.9% (1.45% for the employer's share and 1.45% for the employee's share.
Self-employed persons pay the entire 2.9% via the self-employment tax computed on Schedule SE.
Form 8959, Additional Medicare Tax
You must file Form 8959 if one or more of the following applies to you:
- Your Medicare wages and tips on any single Form W-2 (box 5) are greater than $200,000
- Your RRTA compensation on any single Form W-2 (box 14) is greater than $200,000.
- Your total Medicare wages and tips plus your self-employment income, if any (including the Medicare wages and tips and self-employment income of your spouse, if married filing jointly), are greater than the threshold amount for your filing status in the chart on this page.
- Your total RRTA compensation and tips (Form W-2, box 14) (including the RRTA compensation and tips of your spouse, if married filing jointly) is greater than the threshold amount for your filing status in the chart on this page.
Your Medicare wages include your wages and tips from Form W-2, box 5; your tips from Form 4137, line 6; and your wages from Form 8919, line 6. Your self-employment income includes amounts from Schedule SE, Part I, line 6.
Butnegative amounts shouldn't be considered for purposes of Form 8959. If your Medicare wages, RRTA compensation, or self-employment income is adjusted, you may need to correct your liability, if any, for Additional Medicare Tax.
When correcting Additional Medicare Tax liability, attach a corrected Form 8959 to your original return or amended return, as applicable. If you are correcting Medicare wages or RRTA compensation, also attach Form W-2, Wage and Tax Statement, or Form W-2c, Corrected Wage and Tax Statement.
IRS Examples for Tax Year 2021
Example 1:
Ann, a single filer, has $130,000 in self-employment income and $0 in wages. Ann isn't liable for Additional Medicare Tax and doesn't need to file Form 8959 because her self-employment income is less than the $200,000 threshold for single filers.
Example 2:
Bob, a single filer, has $220,000 in self-employment income and $0 in wages. Bob is liable for Additional Medicare Tax on $20,000 ($220,000 in self-employment income minus the threshold of $200,000). Bob must file Form 8959.
Example 3:
Carl, a single filer, has $145,000 in self-employment income and $130,000 in wages. Carl’s wages don't exceed $200,000. Therefore, Carl’s employer didn't withhold Additional Medicare Tax. However, the $130,000 of wages reduces the self-employment income threshold to $70,000 ($200,000 threshold minus the $130,000 of wages).
Carl is liable for Additional Medicare Tax on $75,000 of self-employment income ($145,000 in self-employment income minus the reduced threshold of $70,000). Carl must file Form 8959.
Example 4:
Don, who is married and files married filing separately, has $150,000 in self-employment income and $200,000 in wages. Don’s wages don't exceed $200,000.
Therefore, Don’s employer didn't withhold Additional Medicare Tax. However, Don is liable for Additional Medicare Tax on $75,000 of wages ($200,000 in wages minus the $125,000 threshold for a married filing separately return).
In addition, the $200,000 of wages reduces the self-employment income threshold to $0 ($125,000 threshold minus the $200,000 of wages).
Don is also liable for Additional Medicare Tax on $150,000 of self-employment income ($150,000 in self-employment income minus the reduced threshold of $0). Don must file Form 8959.
Example 5:
Erin and Frank are married and file jointly. Erin has $150,000 in wages and Frank has $175,000 in wages. Neither Erin nor Frank has wages that exceed $200,000.
Therefore, their employers didn't withhold Additional Medicare Tax. However, their combined $325,000 in wages exceeds the $250,000 threshold for joint filers. Erin and Frank are liable for Additional Medicare Tax on $75,000 of wages ($325,000 in wages minus the $250,000 threshold). Erin and Frank must file Form 8959.
Example 6:
George and Helen are married and file jointly. George has $190,000 in wages and Helen has $150,000 in compensation subject to RRTA taxes. Neither George nor Helen has wages or compensation that exceed $200,000. Therefore, their employers didn't
Instructions for Form 8959