Quick answer
Schedule SE (Form 1040) calculates your self-employment tax: the Social Security and Medicare tax you pay on business profit. It takes your net profit from Schedule C, multiplies it by 92.35%, then applies 12.4% (up to the Social Security wage base, $184,500 in 2026) plus 2.9%. The total goes to Schedule 2, and half of it is deducted on Schedule 1.
Who has to file Schedule SE?
You file it if your net earnings from self-employment are $400 or more for the year. That includes freelancers, sole proprietors, single-member LLC owners and general partners. Married couples who both have self-employment income each file their own Schedule SE.
Part I, line by line
| Line | What it means |
|---|---|
| 1a-1b | Farm profit and certain conservation payments (farmers only) |
| 2 | Net profit from Schedule C (line 31) and/or your share from a partnership (Schedule K-1) |
| 3 | Combine lines 1a, 1b and 2 |
| 4a | Line 3 × 92.35%. If less than $400, you owe no SE tax (unless you use an optional method) |
| 4b-4c | Optional methods (see below) |
| 5a-5b | Church employee income (rare) |
| 6 | Net earnings from self-employment |
| 7 | The Social Security wage base: $184,500 for 2026 |
| 8a-8d | W-2 wages, unreported tips and certain wages already subject to Social Security tax |
| 9 | Line 7 minus line 8d: room left for Social Security tax |
| 10 | Smaller of line 6 or 9, × 12.4% (Social Security) |
| 11 | Line 6 × 2.9% (Medicare) |
| 12 | Self-employment tax (line 10 + line 11), goes to Schedule 2 |
| 13 | Deduction for half of SE tax, goes to Schedule 1 |
Example: $60,760 of Schedule C profit, no W-2 job
| Line | Calculation | Amount |
|---|---|---|
| 2 / 3 | Net profit | $60,760 |
| 4a / 6 | $60,760 × 92.35% | $56,112 |
| 9 | $184,500 − $0 wages | $184,500 |
| 10 | $56,112 × 12.4% | $6,958 |
| 11 | $56,112 × 2.9% | $1,627 |
| 12 | SE tax | $8,585 |
| 13 | Half deductible | $4,293 |
If you also have W-2 wages
Lines 8a-9 make sure you don’t pay Social Security tax twice on the same earnings. Your W-2 wages (Social Security wages, box 3) use up the $184,500 wage base first; only what’s left can be taxed at 12.4% on Schedule SE. Medicare (2.9%) always applies to all SE earnings.
Example: $150,000 of W-2 wages and $60,000 of freelance profit. Line 6 is $55,410, line 9 is $34,500, so line 10 is $34,500 × 12.4% = $4,278, line 11 is $1,607 and SE tax is $5,885 instead of $8,478. See Self-Employment Tax Explained.
If your wages and SE earnings together exceed $200,000 (single) or $250,000 (married filing jointly), you also owe the 0.9% Additional Medicare Tax, calculated on Form 8959, not on Schedule SE.
Part II: Optional methods
The nonfarm optional method lets people with low or no profit report a set amount of earnings anyway, so they keep earning Social Security credits (and sometimes qualify for credits based on earned income). It’s limited in how many years you can use it and in the amount, and it increases your SE tax, so it only makes sense in specific situations. Talk to a tax professional before using it.
Where the results go
| Schedule SE line | Goes to | Effect |
|---|---|---|
| Line 12 (SE tax) | Schedule 2, then Form 1040 | Added to your total tax |
| Line 13 (half of SE tax) | Schedule 1 | Reduces your adjusted gross income |
Self-employment tax is included in your quarterly estimated payments, so plan for it during the year. See Quarterly Estimated Taxes.
Frequently asked questions
Do I need to file Schedule SE if I have a loss?
No, if your net earnings from self-employment are under $400 (a loss included). You still file Schedule C to report the loss.
Do both spouses file Schedule SE?
Each spouse with $400 or more of net SE earnings files their own Schedule SE, even on a joint return.
Is the deduction for half of SE tax an itemized deduction?
No. It’s an adjustment to income on Schedule 1, so you get it even if you take the standard deduction.
Does tax software fill out Schedule SE automatically?
Yes. Once you complete Schedule C, most software calculates Schedule SE for you. It’s still worth checking that W-2 wages were counted correctly.
This article is general information, not tax advice. Consult a CPA or Enrolled Agent for your situation.
Sources
- Social Security taxable wage base 2026 (Paycor): $184,500 wage base, rates and Additional Medicare thresholds.
Line numbers follow the IRS Schedule SE form and instructions. The examples are FreelancerTaxHQ calculations.