Form Schedule SE - Self Employment Tax
Form 1040 Schedule SE is a federal tax form used to report self-employment tax. It's used by self-employed individuals, including sole proprietors, partners, and S corporation shareholders, to calculate and report their self-employment tax liability.
Who needs to file Schedule SE?
You need to file Schedule SE if you have net earnings from self-employment of $400 or more. This includes income from:
- Self-employment business, such as freelance writing, consulting, or coaching
- Partnerships, including limited liability partnerships (LLPs) and limited liability companies (LLCs)
- S corporations, if you're a shareholder who receives income from the corporation
What do I need to report on Schedule SE?
On Schedule SE, you'll report your net earnings from self-employment, which is your gross income from self-employment minus business expenses. You'll also calculate your self-employment tax, which is 15.3% of your net earnings from self-employment (12.4% for Social Security and 2.9% for Medicare).
Parts of 1040 Schedule SE:
Schedule SE consists of three parts:
- Part I: Self-Employment Tax: This part is used to calculate your self-employment tax liability. You'll report your net earnings from self-employment, calculate your self-employment tax, and claim any deductions or credits you're eligible for.
- Part II: Self-Employment Tax Computation: This part is used to calculate your self-employment tax liability if you have income from multiple businesses or partnerships.
- Part III: Optional Methods to Figure Net Earnings: This part provides optional methods to calculate your net earnings from self-employment, such as the farm optional method or the nonfarm optional method.