Schedule SE
Quick definition
The federal form that calculates self-employment tax (Social Security + Medicare) for self-employed workers.
Schedule SE calculates your self-employment tax. If you have at least $400 in net self-employment earnings, you file Schedule SE alongside Schedule C.
What it taxes
Self-employment tax is the self-employed equivalent of the FICA payroll tax that W-2 workers pay. See self-employment tax for the rate breakdown (15.3% combined). Schedule SE applies that rate to 92.35% of your net Schedule C income.
Why mileage matters here
The mileage deduction reduces your Schedule C income BEFORE Schedule SE is calculated. So a $1,000 mileage deduction reduces your SE tax by about $153 in addition to whatever your federal income tax bracket saves you. This is the "double benefit" of mileage deductions for self-employed workers.
Related terms
Schedule C
The federal form self-employed workers use to report business income and expenses, including the mileage deduction.
Self-Employment Tax
The 15.3% tax on net self-employment income that funds Social Security and Medicare.
1099-NEC
The form payers issue to report $600+ in nonemployee compensation. If you got one, you are self-employed for IRS purposes.
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