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Self employment income is your net profit from your business or profession, whether you participate full or part time. Members of a partnership also must pay self-employment taxes.Self-employment taxes provide funds for Social Security and Medicare benefits. Self Employment taxes are calculated on Schedule SE, which you are required to file if you earn more than $400 in self-employment income. The self-employment tax rate is 15.3 percent (12.4 percent for Social Security and 2.9 percent for Medicare). Self-employment taxes of 15.3 percent apply to earnings under $87,000. For any earning over $87,000, only the 2.9 percent Medicare tax applies. Self-Employment taxes apply to .9235 percent of your net income. Also, after you have figured self-employment taxes, you can then deduct 50 percent.

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