If you are self-employed, you most likely have to pay self-employment tax. Self-employment tax consists of Medicare and Social Security taxes for individuals who work for themselves and is similar to the Medicare and Social Security taxes that are withheld from the pay of most people who earn wages.
In order to figure self-employment tax, you should use Schedule SE (Form 1040).
You must pay self-employment tax and file Schedule SE (Form 1040) if your net earnings from self-employment were $400 or more. For church employees, your income needs to be $108.28 or more.
Generally, you must pay self-employment tax on net earnings from self-employment. If you are self-employed as a sole proprietor or independent contractor, you generally use Schedule C or C-EZ to figure net earnings from self-employment.
If you have earnings subject to self-employment tax, use Schedule SE to figure your net earnings from self-employment. Before you figure your net earnings, you generally need to figure your total earnings subject to self-employment tax.
Note: The self-employment tax rules apply no matter how old you are and even if you are already receiving Social Security or Medicare.
If you have questions about self-employment tax, consult with a tax professional.