U.S. Self Employment Income
|
| 2012 FICA | Rate | Wage Base Limit | Maximum Tax |
|---|---|---|---|
| Social Security | 10.4%* | $110,100 | $11,450.40* |
| Medicare | 2.9% | unlimited | no limit |
| 2011 FICA | Rate | Wage Base Limit | Maximum Tax |
|---|---|---|---|
| Social Security | 10.4% | $106,800 | $11,107.20 |
| Medicare | 2.9% | unlimited | no limit |
| 2010 FICA | Rate | Wage Base Limit | Maximum Tax |
|---|---|---|---|
| Social Security | 12.4% | $106,800 | $13,243.20 |
| Medicare | 2.9% | unlimited | no limit |
You deduct half of your self employment tax on page 1 of your Form 1040.
If your net earnings are less than $400, you have an optional method of reporting your self employment income.
The Bookkeeper's Self Employment Income Information
2011/2012 USA Estimated Tax Payments Due Dates
This is the method used to pay income taxes on income not subject to withholding taxes.
You need to pay estimated taxes each quarter if your tax is $1,000 or more after subtracting withholdings and credits ... AND you expect your withholdings and credits to be less than 90% of your 2010 taxes paid OR 100% of your 2009 taxes paid. You may be charged a penalty if you don't pay enough tax by each due date.
| Tax Type | Tax Period | Form to be Filed | Filing AND Payment Deadline | Week Day |
|---|---|---|---|---|
| 1st Tax Installment | Jan-Mar 2012 | 1040-ES | April 17, 2011 | Tuesday |
| 2nd Tax Installment | Apr-Jun 2012 | 1040-ES | June 15, 2012 | Friday |
| 3rd Tax Installment | Jul-Sep 2012 | 1040-ES | September 17, 2012 | Monday |
| 4th Tax Installment | Oct-Dec 2012 | 1040-ES | January 17, 2013* | Tuesday |
| Annual Est. Payment Farmers, Fishermen | 2012 | 1040-ES | January 17, 2013 | Tuesday |
*You don't need to pay the January 17 estimated tax payment if you file your 2011 tax return with taxes due by January 31, 2012.
See the IRS Estimated Taxes Guide for more small business information on estimated taxes located on their website at IRS> Businesses> Self-Employed> If your are self-employed you must pay Estimated Taxes .
There is also a good small business tax information article on How Much to Pay at fairmark.com/estimate/howmuch.htm. It explains how to decide what is the best way for you to calculate your estimated taxes.
The Bookkeeper's Self Employment Income Information
2012 Standard Mileage Rates
Source: N-2012-01 (A-2011-40); IR 2011 116 (IR-2010-119)
| 2012 Cents/Mile | Rate Type | 2011 Cents/Mile |
|---|---|---|
| 55.5 | Business Miles Driven* | 51.0 1st 6 months 55.5 last 6 months |
| 23.0 | Moving / Relocation Purposes | 19.0 1st 6 months 23.5 last 6 months |
| 23.0 | Medical Purposes | 19.0 1st 6 months 23.5 last 6 months |
| 14.0 | Charitable Services Rate | 14.0 |
*You cannot use the business standard mileage rate :
- for any vehicle used for hire or for more than four vehicles used simultaneously;
- for a vehicle after claiming a Section 179 deduction for that vehicle; or
- after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS).
Vehicle means any car, van, pickup or panel truck. You always have the option of calculating the actual costs of using your vehicle rather than using the standard mileage rates.
You do need a mileage log to support the number of miles your vehicle was driven for business purposes.
While you can't deduct actual vehicle operating costs (fixed and variable) under this method, you are allowed to deduct parking and toll expenses related to business, the business portion of interest paid on vehicle loans, and the business portion of any local or state personal property tax paid on the vehicle. (See IRS Revenue Procedure 2010-51 Section 4.03.)
Historical mileage rates can be found of on the IRS website at irs.gov/taxpros/article/0,,id=156624,00.html . If the page can't be found when you key it into your browser, do a search on the IRS website for "standard mileage rates". Choose the article titled Standard Mileage Rates ... following table summarizes ...
The standard mileage rates are based on an annual study by independent contractor Runzheimer International. The study based the business rate on the fixed and variable costs of operating a vehicle while medical and moving are based on the variable costs.
Additional small business tax information on using the standard mileage rate can be found in IRS Publication 463 Travel, Entertainment, Gift, and Car Expenses.
If you made it this far, I think you've earned a nice, hot cup of tea. :o)
The U.S. Tax - Links
Visit U.S. Employee Payroll Taxes
Visit U.S. Tax Compliance Information
Visit IRS News - Small Business Information
Return to Home Page From U.S. Self Employment Income
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