If you work for yourself, you're still obligated to pay Social Security and Medicare taxes, which are usually taken out of your paycheck automatically by an employer. The Internal Revenue Service, or IRS (I-R-S), considers you to be working for yourself if you perform a trade or conduct business as a sole proprietor, you're an independent contractor or a partnership member, or you're in business for yourself in some other way. You can do this work full- or part-time and can even be employed elsewhere as an employee. Nonresident aliens who meet these qualifications, however, are not subject to this tax. You must pay self-employment taxes if your net earnings were $400 (four hundred dollars) or more or if you performed services for a church as an employee and received an income of $108.28 (one hundred eight dollars and twenty-eight cents) or more. You're also required to pay self-employment taxes if you're fully insured by Social Security or are receiving Social Security benefits. To file the tax, figure your income and your net earnings from your employment, and then multiply your net earnings by the appropriate tax rate. Enter this amount on line 50 of Form 1040 (ten forty) and attach the Schedule SE (S-E) to your return. For returns filed jointly, both parties must submit separate Schedule SEs (S-Es), even if both have earned income from self-employment. If you don't accurately report your self-employment income, you could lower your Social Security benefits when you retire, so consult a tax professional if your uncertain about claiming and/or filing your self-employment taxes.
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