A self-employment tax estimator is an online tool that helps self-employed individuals calculate their estimated quarterly tax payments. Self-employment taxes are taxes that self-employed individuals pay to cover social security and Medicare. These taxes are typically paid in addition to income taxes. The self-employment tax rate is 15.3%, which is divided into 12.4% for social security and 2.9% for Medicare. Self-employed individuals are responsible for paying both the employer and employee portions of these taxes.
Self-employment tax estimators can be helpful for self-employed individuals in several ways. First, they can help individuals estimate their tax liability so that they can budget accordingly. Second, they can help individuals avoid penalties for underpayment of taxes. Third, they can help individuals maximize their tax deductions and credits.
