CashoutGlossary / Schedule SE
Schedule SE
The Form 1040 schedule that figures self-employment tax, the Social Security and Medicare tax you pay yourself on net earnings from your own work.
Schedule SE turns your business profit into self-employment tax. It starts on line 2 with your net profit from Schedule C, line 31.
How the 2026 draft works:
- Line 4a: multiplies your profit by 92.35%, so only that share is taxed.
- Line 4c: if the result is under $400, you stop. You don't owe self-employment tax.
- Line 10: 12.4% for Social Security, only up to $184,500 of combined wages and self-employment earnings for 2026. Social Security wages and tips from your W-2s count toward that limit.
- Line 11: 2.9% for Medicare, with no cap.
- Line 12: the total, which goes to Schedule 2.
- Line 13: half of line 12, which goes to Schedule 1 line 15 as a deduction from income.
The 0.9% Additional Medicare Tax on high earnings is figured separately, on Form 8959.
Common mistake: thinking the standard deduction or the No Tax on Tips deduction lowers this tax. Schedule SE starts from Schedule C profit, and neither deduction comes into it. The tips deduction is claimed on Schedule 1-A, not Schedule C.
Example: On $20,000 of net profit: $20,000 x 92.35% = $18,470. Social Security is $18,470 x 12.4% = $2,290.28 and Medicare is $18,470 x 2.9% = $535.63, for $2,825.91 of self-employment tax. Half of that, about $1,413, is deductible on Schedule 1.
Related terms
Self-employment tax · Schedule C · Deductible part of self-employment tax · FICA
