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How To Do a Quick Estimate of Your Self-Employment Taxes

by Jan K., The Proofer

Once you become self-employed, either full-time or part-time, you will need to pay self-employment taxes. These taxes are in addition to your federal and state/city income taxes, and represent the deductions an employer would normally take for what is usually called “Social Security” tax (or FICA and Medi-Care taxes). You must self-report and pay these taxes based on your annual net taxable self-employment wages.

It is important to understand that you may be liable to make quarterly payments of your self-employment taxes. In order to determine this, you may need the help of a qualified tax accountant, you may wish to consult with a paid tax service (such as H&R Block), or you can contact the IRS to ask for assistance in making this determination. This article should not be construed as the final authority on how much self-employment tax you owe and how or when you must pay it.

During the year, and as you earn money from your at-home business or other self-owned business, you can estimate the Self-Employment Taxes that you are going to owe using the handy, easy-to-use spreadsheet that accompanies this article as a free printable, which will open in a new window as an Excel file. You will need Microsoft Excel in order to download, open, and use the spreadsheet. You might want to open the spreadsheet now, so that you can review it while you read how to use it. Go to:

Net Taxable Self-Employment Income

When you file your federal income taxes (Form 1040), you will need to submit Schedule C (or C-EZ) and Schedule SE. These schedules are available as a free download (as are all federal income tax forms) from You might need to download Schedule SE and print one, so that you can review it while you read the remainder of this article.

Using Schedule C (or Schedule C-EZ), you will first calculate your net taxable income from self-employment. Essentially, you will indicate your total gross self-employment income for the year (the money paid to you from your clients and/or other sources of personal income such as income from affiliate programs or commissions paid from other web-based sources), deduct business expenses (as allowed), and arrive at your net taxable self-employment income. You will use this amount on Schedule SE.

If you need help in completing Schedule C/C-EZ, or any other tax form necessary for filing income from self-employment, you should seek expert advice from a qualified tax accountant, paid tax service (such as H&R Block), or request assistance directly from the IRS. Do not rely on this article as your sole source of instruction for calculating your self-employment tax; this is meant only as a tool to help you estimate the amount of tax you will owe.

Estimating Your Self-Employment Taxes during the Year

Whether you will be required to make quarterly payments or whether you can pay one lump sum at the end of the year when you file your federal income taxes, it may be helpful to estimate your self-employment taxes due, on a job-by-job (or payment-by-payment) basis. For that, you can either use the handy spreadsheet that comes with this article, or just follow the example shown below. Remember that this is only an estimate of the actual taxes that you will owe. You can use this estimate in order to set aside enough money, as you get paid by your clients and/or receive commission checks, so that you will be able to pay your self-employment taxes as required.

To make this easily understandable, a simple example in the amount of $150.00 will be used as an example of income you have received from a client or customer (and will also be shown on the free printable spreadsheet that accompanies this article). This could be a check from a client for services rendered or products delivered, or could be a check received as income from an affiliate program or other type of commission received.

Calculation of Estimated Self-Employment Taxes Due Using Schedule SE

All calculations here reference Schedule SE. These calculations are also shown on the free printable spreadsheet that accompanies this article. You should refer to Schedule SE while you review the calculations shown below.

Remember: This is a method that you can use to estimate your self-employment taxes due. This should not be used as the final authority for calculating your actual taxes due.

Calculate the estimate of self-employment taxes due on $150.00

1. Starting on Line 2 of Schedule SE, report 150.00.

2. Show this same amount on Line 3.

3. For Line 4, multiply 150.00 by 92.35: 150.00 x .9235 = 138.525. Report 138.53 on Line 4.

4. For Line 5, multiply 138.52 by 15.3: 138.52 x .153 = 21.19356. Report 21.19 on Line 5.

For self-employment income of $150.00, you will owe approximately $21.19 in self-employment taxes.

You can use this easy calculation to estimate the taxes that are due each time you receive payment from a client or other source of self-employment income. Of course, this is only an estimate and does not take into account the fact that you can reduce your gross self-employment income by the dollar amount of business expenses you have during the year. However, it is a good way to know approximately how much money to set aside for paying your self-employment taxes.

Calculation of Estimated Self-Employment Taxes Due Using the Free Printable Excel Spreadsheet

Accompanying this article is a free printable spreadsheet that you can use to calculate and keep track of your estimated self-employment taxes. You will need Microsoft Excel in order to be able to download, open, and use this spreadsheet:

The sample of $150.00 is shown at the beginning of the spreadsheet. Below that is the work area that you can use. All you need to do is key in your payment amount into Column A, starting on Row 10. After you key in a dollar amount, simply hit the Enter key to perform the calculation. Try it by inserting 200.00 (key 2,0,0,dot [period],0,0) and hit Enter. The spreadsheet will calculate the estimated taxes due on $200.00, or $28.26.

By calculating your estimated taxes due, you can set aside enough money so that paying your taxes won't be a financial burden.

Remember: Get tax advice from a reliable and responsible source!

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About the Author:

Jan K., The Proofer is freelance proofreader and copyeditor. Visit for more information about Jan’s proofreading and copyediting services and Jan's other free resources. Please visit Mom's Break ( for free printable crafts and projects.

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