Who should pay Self-Employment Tax
You are considered self-employed if you are an independent contractor, a sole proprietor, a member of a partnership, or are otherwise in business for yourself.
You must pay self-employment tax if you have net earnings of $400 or over.
Your net earnings is used to figure out your self-employment tax liability and includes in most cases, your net earnings from a farm or nonfarm business.
If you are operating more than one business the combined net earnings from all your businesses is used to calculate liability.
The maximum amount of your businesses earnings that is subject to self-employment tax stands currently at over $85,000.00
You may make a request for an exemption from self-employment tax from the IRS if you are member of the ministry or clergy.
Tags: clergy earnings Human Resource independent contractor partnership self employed self employment tax