Self-employment tax can be a tricky issue for small business owners and those who are self-employed. With tax season upon us, the 2017 self-employment tax table may be of great interest to many. The purpose of this article is to provide an overview of the 2017 self-employment tax table, including how it works, who it applies to, and how to use it.
The 2017 self-employment tax table includes information on the income tax rate and amount owed by those who are self-employed. This table is important to understand, as it has significant implications for those who are self-employed, freelancers, independent contractors, or other small business owners. Failure to pay the correct amount of taxes can lead to serious fines and penalties.
To begin, it's important to understand who is subject to self-employment tax. Generally, if you are self-employed and your net earnings from self-employment are more than $400, you must file a self-employment tax return. The self-employment tax rate is 15.3%, which includes contributions to Social Security and Medicare. The self-employment tax applies to the first $127,200 of net earned income for 2017. Anything above that amount is not subject to the self-employment tax.
The 2017 self-employment tax table provides information on the amount of tax owed based on your earnings. For example, for earnings between $0 and $9,325, the self-employment tax rate is 15.3% of total earnings. For earnings between $9,325 and $37,950, the rate is 2.9% of the amount over $9,325. The table also includes rates for earnings over $127,200. For those earning over $127,200, no self-employment tax is due.
In addition to understanding the self-employment tax rate and amount owed, it is important to understand how to claim deductions and credits when filing taxes. Self-employed individuals may be able to take advantage of deductions and credits that are not available to traditional employees. These deductions and credits can be used to reduce the amount of self-employment tax owed.
Finally, it is important to understand the importance of keeping accurate records when filing taxes. Accurate records are essential for ensuring that the correct amount of self-employment tax is paid. Keeping track of income and expenses throughout the year can help to ensure that all necessary information is reported correctly.
Understanding the 2017 self-employment tax table can help small business owners and those who are self-employed to be prepared for tax season. Knowing the self-employment tax rate and amount owed can help to avoid costly mistakes and ensure that the correct amount of tax is paid. Additionally, taking advantage of deductions and credits can help to reduce the amount of taxes owed. Finally, keeping accurate records throughout the year is essential for filing taxes correctly.
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