The law sets the self-employment tax rate as a percentage of your net earnings from self-employment. This rate consists of 12.4% for social security and 2.9% for Medicare taxes. The maximum amount of net earnings subject to the 12.4% social security portion of the self-employment (SE) tax for 2022 is $147,000. All net earnings of at least $400 are subject to the Medicare part of the tax.

Self-Employment Income is income from:

• Sole proprietorship business (Schedule C (Form 1040) Profit or Loss From Business)
• Farm (Schedule F (Form 1040) Profit or Loss From Farming)
• Certain partnership income and guaranteed payments (Schedule K-1 (Form 1065) Partner’s Share of Income, Deductions, Credits, etc.)
• Church employee (lay persons) income of $108.28 or more
• Income for services performed as a minister or a member of a religious order

See Topic No. 554 Self-Employment Tax and Understanding Employment Taxes for detailed information.

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