If you’re a sole proprietor, every year you must file Schedule C(Profit or Loss From Business) with your Form 1040 (U.S. IndividualIncome Tax Return) to report your business’s net profit and loss.You also must file Schedule SE (Self-Employment Tax) with your 1040if your net earnings from self-employment were $400 or more. Theself-employment tax rate is 15.3%. The rate consists of two parts:12.4% for social security (old-age, survivors, and disabilityinsurance) and 2.9% for Medicare (hospital insurance).
You can deduct half of your SE tax in figuring your adjustedgross income. This deduction only affects your income tax. It doesnot affect either your net earnings from self-employment or your SEtax.
If you’re a calendar-year taxpayer, your tax filing date isApril 15. Fiscal-year taxpayers must file their returns no laterthan the 15th day of the fourth month after the end of their taxyear.
