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Chapter 36. Business Taxes > Self-Employment Tax

Self-Employment Tax

If your boss does business as a partnership or a sole proprietor, he or she receives profits directly from the company. No Social Security tax is withheld from these profits. Therefore, when it comes time to file annual tax returns, your employer must pay a self-employment tax and file a Schedule SE. At the same time, any non-incorporated business owner must also file a Schedule C to report his or her business income just as employees on a payroll must pay their taxes throughout the year through withholding, so anyone owing self-employment tax must make estimated tax payments throughout the year. This can be done using 1040ES forms available from the IRS and sending payments into the IRS office for the particular IRS estimated tax region.


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