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Do the taxes listed in the Tax Tables of the IRS 1040 Instructions booklet include Medicare and Soc Sec tax?


As a self-employed person, I have to compute taxes from the tax tables and Schedule SE. However, if I have a simple W-2, I only figure my taxes from the tax tables. This leads me to conclude that the tax tables include income tax, Social Security and Medicare taxes. Therefore, why would I have to use both the tax tables and Schedule SE? I'd be paying Social Security and Medicare tax TWICE!

An employed person pays 7.65% of his wages to Social Security and Medicare, and his employer pays 7.65% of the employee's wages to Social Security and Medicare. The employee pays income tax on his contribution to SS and Medicare, but does not pay income tax on the employer's contributions.

The self-employed person person is responsible for both employee and employer contributions to Social Security and Medicare. However, Schedule SE does the following:

1. Excludes 7.65% of net earnings from the computation of Social Security and Medicare taxes.

2. Reduces income from self-employment by 1/2 of the SS and Medicare taxes assessed.

These two steps have the effect of treating the self-employed person as both employer and employee without taxing employer's share of SS and Medicare, or assessing SS and Medicare on the employer's share of SS and Medicare (pyramiding the taxes).

So you are in fact paying SS and Medicare twice, but your income taxes are treated as if you were an employee.
No. They only include income tax, and do not take into account any withholding, even for income tax. That is why, at the end of the return, you get to deduct any withholding or estimated tax you have paid.
26 U.S.C. 搂 3
I think your answer lies further into the return. You first calculate the amount you owe for Self Employment. On the back side of a paper return is a place where you credit 50% of that amount. So yes, you put the entire amount on the front and then take half of it off later. That's the simple answer, and the one I'm assuming that you're looking for.
The Tax tables are Federal Income tax only, it does not include SE tax. that is why as a self employed person you are required to complete the Sch SE, so that you are paying your own SS and Medicare tax
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