In this video we're going to talk about how to calculate your self-employment tax, but before we do if this is your first time at our channel, or you haven't subscribed click on the subscribe button at the bottom my name is Travis sickle certified financial planner helping you reach your financial goals, so self-employment tax is your payroll tax also known as FICA and FICA is your federal insurance contributions act and these are the payments the payroll payments that you're making to pay for social security and medicare now they can further be broken down into the employer side and the employee side so as somebody who is self-employed you're going to pay both sides because you're both the employee and the employer now before we do the calculation I want to break it down just so you can see how all the numbers add up, so we're going to start with social security and medicare, so the social security side is going to be 6.2 percent for the employee, and then it's going to be 6.2 percent for the employer and then on the medicare side it's going to be 1.45 percent for the employee and then 1.45 for the employer now if we add up the social security that's going to equal 12.4 percent and then if we add up the medicare side that's going to be 2.9 which is we add these two numbers up 12.4 percent plus the 2.9 percent that is going to equal 15.3 percent and if we further add these two and these two that's going to be 7.65 percent for the employee and then 7.65 percent for the employer which equals our 15.
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About MI Self-Employment Income and Expense Statement Form
The MI Self-Employment Income and Expense Statement Form is a document used by individuals in the state of Michigan who are self-employed or have income from a business venture. This form is specifically designed for the reporting of income and expenditures related to self-employment. The purpose of this form is to accurately report the total income generated by a self-employed individual and deduct any legitimate business expenses incurred during the reporting period. It allows self-employed individuals to calculate their net self-employment income, which is used for taxation purposes. The MI Self-Employment Income and Expense Statement Form is typically required by the Michigan Department of Treasury or the Internal Revenue Service (IRS) during the tax filing process. It ensures that self-employed individuals accurately report their income and expenses, and helps determine their tax liability. Any self-employed individual in Michigan, whether operating as a sole proprietor, freelancer, independent contractor, or business owner, may need to use this form to report their self-employment income and expenses.
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