Schedule SE is a Form 1040 attachment that some taxpayers may need to file. In this article, we will discuss what a Schedule SE is for and when you may need to include on with your tax return.
The purpose of filing a Schedule SE is to calculate and report any self-employment tax you may owe. Self-employment taxes are Social Security and Medicare taxes due on self-employment income. If you are a W2 employee, you typically pay half of these taxes and your employer pays the other half. This is usually done with payroll processing. However, if you are self-employed you are responsible for paying the full amount due.
The secondary purpose of the schedule is to calculate your Social Security Benefits. The Social Security Administration uses the information you report on your schedule to calculate these benefits.
Who Needs to File
Not everyone needs to file a Schedule SE. One will only be necessary for certain situations. The first situation is if you make more than $400 of self-employment income in a year. The second is if you make $108.28 or more as a church employee.
It is important to note that if your income came from multiple businesses you do not need to file multiple schedules. You will just combine the income and report it on one form. However, if you are married and both you and your spouse are self-employed you must each file your own schedule.
If you need to file a Schedule SE, there are some special considerations you need to take into consideration. First, there is no age limit on filing a Schedule SE. Even if you are receiving Social Security or Medicare benefits, if you are earning self-employment income, you must file. The second consideration is that you can file an extension for filing. However, the extension does not extend when payments are due. By filing an extension and failing to pay you will subject yourself to additional penalties and interest.
Filing a Schedule SE
If you need to file a Schedule SE, meet with a qualified tax preparer who can help you to prepare it correctly.
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