If you're self-employed, either full-time or part-time, you don't have to earn much money to be obligated to file a tax return and pay quarterly estimated taxes. For 2013, the trigger amount was net earnings of $400 or more. As a sole proprietor or independent contractor, you must pay the Self-Employment Contributions Act tax along with income taxes.
SECA Contributions
The SECA tax serves as the equivalent of the Federal Insurance Contributions Act for Social Security, paid by employees and employers. The catch for the self-employed is that you must pay the entire 12.4 percent of SECA, rather than the 6.2 percent paid by employees for FICA. Employers pay the other half. However, you can claim that extra 50 percent payment as an income tax deduction. You'll also have to pay a 2.9 percent Medicare tax on your earnings.
References
Writer Bio
Jane Meggitt has been a writer for more than 20 years. In addition to reporting for a major newspaper chain, she has been published in "Horse News," "Suburban Classic," "Hoof Beats," "Equine Journal" and other publications. She has a Bachelor of Arts in English from New York University and an Associate of Arts from the American Academy of Dramatics Arts, New York City.