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What is a Schedule SE?

What is a Schedule SE?

If you’re self-employed or work as an independent contractor, you likely will need to fill out a Schedule SE when you file your year-end taxes. Typically, you’ll first fill out a Schedule C form for your independent business to calculate your total profit (earnings - expenses = profit). The Schedule C is where you list all the awesome tax write offs (like mileage and cell phone deductions) you’re entitled to as an independent worker! After you get an idea of business profit (or sometimes business loss in certain cases), you’re ready to use the Schedule SE to determine how much in taxes you’ll owe on that business profit. 

How to fill out the Schedule SE

Tax forms are complicated, which is why the IRS has made simplified versions of the most commonly used forms (the 1040 has a 1040-EZ and the Schedule C has a Schedule C-EZ). Guess what! There’s also a simplified Schedule SE aptly named the Short Schedule SE. 

The IRS developed a really helpful chart for you to determine whether you qualify for using the Short Schedule SE (Hint: only if you earned over $118,500 in unreported tips should you use the Short version). 

The IRS developed a really helpful chart for you to determine whether you qualify for using the Short Schedule SE (Hint: only if you earned over $118,500 in unreported tips should you use the Short version). 

Line-by-Line Breakdown of the Short Schedule SE, Section A

Line 1a:  Net farm profit - This applies to farmers where they note their total profit or loss

Line 1b: Social Security, Retirement, or Disability - Enter here the amount you’ve received from any of these program

Line 2: Net profit (or loss) from the Schedule C - Here is where you’ll write in the profit or losses from your Schedule C or multiple Schedule C’s

Line 3: Add it all together - This line is where you sum the numbers you wrote above

Line 4: Calculate your tax obligation - This is where you multiply the line above (3) by 92.35% (.9235). (If this amount is less than $400, then you do not need to pay any self-employment tax. Write the total amount after multiplying on this line.

Line 5: Self-employment tax - If the amount on line 4 is:

  • $118,500 or less: multiply line 4 by 15.3% (.153). Enter the result here and on Form 1040, line 57, or Form 1040NR, line 55
  • More than $118,500: multiply line 4 by 2.9% (.029). Then, add $14,694 to the result. Enter the total here and on Form 1040, line 57, or Form 1040NR, line 55

Line 6: Deduction for one-half of self-employment tax - Multiply line 5 by 50% (.50). Enter the result here and on Form 1040, Line 27, or Form 1040NR, line 27. 

Yes! This line means you get to deduct one half of the amount you’ll pay for self-employment tax. This is deducted from your total taxable income that’s subject to the income tax (calculated on the 1040). This is where the IRS makes sure you pay a lower amount on overall income tax because of the self-employment tax you pay (as mandated by Self-Employment Contributions Act).

Last step: Plug the final amount into your 1040, Line 57. You’ve done it, you calculated your self-employment taxes. The final piece is to put it in your individual return, the 1040. 


Laura Zulliger has spent the past five years empowering independent contractors with knowledge about health, taxes, and personal finance. Prior to joining Stride, she worked at NerdWallet and Zen99, two companies that specialize in helping people make better financial decisions. 

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