The self-employment tax rate for 2009 is 15.3% on self-employment income up to $106,800, plus 2.9% for Medicare tax on earnings over $106,800.
All net earnings of at least $400 are subject to the Medicare part of the tax.
If your net earnings exceed $106,800 for 2009 you continue to pay taxes – but only on the Medicare portion of the Social Security tax. (The Medicare tax for the tax year 2009 is calculated at 2.9 percent on the rest of your earnings.)
Chart Comparison of Self-employment Tax Rates for 2007, 2008 and 2009
Additional Changes in 2009 Self-Employment Taxes
The dollar thresholds for using the optional methods to figure net earnings from self-employment have increased for the tax year 2009. The maximum social security coverage under the optional methods is four credits (or, the equivalent of $4,360 of net earnings from self-employment.)
- Farm Optional Method: You may use this method if your gross farm income was $6,540 or less, or your net farm profits were less than $4,721 in 2009.
- Nonfarm Optional Method: You may use this method if your net nonfarm profits were less than $4,721 and also less than 72.189% of your gross nonfarm income.
