If you have business income, net profit from Schedules C or F, guaranteed payments from a Partnership, or wages from an S-Corporation, you are considered "self employed" and subject to self employment tax (comprised of social security tax equals to 12.4% of the business income up to $106,800 and Medicare tax equals to 2.9% of the business income) , to use it in your tax return, please click here.
The Internal Revenue Code (IRC) allows you to claim
50% of the self employment tax you are liable for as an adjustment to
your adjusted gross income (AGI). The deduction is claimed on Form 1040
Line 27 and must equals to 50% of the amount of self-employment tax
reported on Schedule SE and on Form 1040 Line 58. |
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