What is the self-employment tax rate?

The self-employment tax rate for Washington residents is 15.3%. This rate is made up of two parts: 12.4% for Social Security and 2.9% for Medicare. Both self-employed individuals and employers are responsible for paying this rate. The self-employment tax rate is designed to provide the same benefits to self-employed individuals that would normally be provided by an employer to full-time employees. This includes Social Security and Medicare benefits. Without paying the self-employment tax, self-employed individuals would not be able to receive the same level of benefits. The self-employment tax rate is generally higher than the rate paid by employers, because employers pay half of their share of Social Security and Medicare taxes. The additional 3.9% is intended to make up the difference for the self-employed. Self-employed individuals who earn more than $400 per year are required to pay self-employment taxes in the state of Washington. If a self-employed individual falls below this threshold, they may still pay self-employment taxes, but they have the option to opt-out. It is important to keep in mind that the self-employment tax rate is subject to change, so it is important to stay updated with the latest rates and regulations. Additionally, self-employed individuals may be eligible for certain credits or deductions, so it is important to consult with a tax professional if you have any questions.

Related FAQs

What constitutes a tax shelter?
Are medical expenses tax deductible?
Is my business income taxable?
How much tax do I have to pay on inheritance?
What is a tax return estimate?
What is taxation without representation?
What is the difference between standard and itemized deductions?
Are there any tax credits available for renewable energy investments?
What is the difference between a tax preparer and a tax advisor?
What deductions can I claim for my business?

What is the self-employment tax rate?

Related FAQs

Related Blog Posts