1415.Social Security Taxes on Self-Employment Income
1415.1What are the tax rates on self-employment income?
Social Security taxes are paid on self-employment income up to the maximum amount creditable for the year. Medicare taxes are paid on all self-employment income, as there is no yearly maximum. (See §1201.) The Social Security and Medicare tax rates on self-employment income are shown in the following chart:
Taxable year | Retirement, survivors, and disability insurance rate | Hospital insurance rate | Combined rate |
|---|---|---|---|
1985 | 11.40% | 2.70% | 14.10% |
1986-1987 | 11.40% | 2.90% | 14.30% |
1988-1989 | 12.12% | 2.90% | 15.02% |
1990-2010 | 10.40% | 2.90% | 13.30% |
1415.2What tax credits are allowed for self-employed persons?
If you were self-employed in 1984-1989, you were allowed credit against your Social Security and Medicare tax liability for those years in the following percentages:
Taxable Year | Percentage Rate |
|---|---|
1984 | 2.7% |
1985 | 2.3% |
1986-1989 | 2.0% |
After 1989, the credit was replaced with special deduction provisions designed to treat the self-employed like employees and employers are treated for Social Security and income tax purposes.
Last Revised: Aug. 8, 2011