05/26/2026
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If you're a sole proprietor or a partner, you're likely paying more than just federal income taxes. Self-employment taxes, which include Social Security and Medicare taxes, can be significant. Here's a quick breakdown:
πΉ Social Security Tax: 12.4% up to $176,100 (2025 limit)
πΉ Medicare Tax: 2.9% on all self-employment income
πΉ Additional Medicare Tax: 0.9% if income exceeds $200,000 (single) or $250,000 (married filing jointly)
These taxes are calculated on 92.35% of your net business income, making business deductions doubly valuable. Remember, not all income types are subject to self-employment tax, such as gains from the sale of capital assets or most rental income.
For LLC members and partners, the rules can be a bit more complex, especially with proposed IRS regulations. Always consult with a tax professional to ensure you're compliant and optimizing your tax situation.
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Self-Employment Taxes For Sole Proprietors
