IRS Form Schedule SE (Form 1040)

Practical overview

Schedule SE is computed on net earnings from self-employment, defined as 92.35% of net Schedule C or partnership self-employment income. The Social Security portion applies only up to the annual wage base, while Medicare applies to all earnings, and Additional Medicare Tax of 0.9% applies above threshold amounts. Half of SE tax is then deductible as an adjustment to gross income on Schedule 1.

Practical steps

• Aggregate net earnings from Schedule C, Schedule F, and partnership K-1 box 14 (code A).
• Multiply by 92.35% to compute net earnings subject to SE tax.
• Apply the current-year Social Security wage base to the OASDI portion.
• Compute the Medicare portion on all earnings; consider Additional Medicare Tax via Form 8959.
• Carry total SE tax to Schedule 2 and the deductible half to Schedule 1.

Due-date notes

Penalty snapshot

Failure-to-pay and underpayment-of-estimated-tax penalties under IRC § 6654 may apply if quarterly estimated payments were insufficient.