Deductible Part of Self-Employment Tax

Any self-employed taxpayers who owe self-employment tax for the year may qualify for this deduction. Self-employment income includes any of the following: net profit from Schedules C or F, guaranteed payments from a Partnership, or wages from an S-Corporation.

Schedule SE is used to determine the amount of self-employment tax that will be deductible. The self-employment tax deduction is be limited to one-half of the self-employment tax figure. Taxpayers using Section A of Schedule SE will deduct the value computed on Line 6 of Schedule A. Those using Section B of Schedule SE will deduct the value on Line 13. Regardless of which Section is used, the deduction value should be transferred to Form 1040’s Line 27. Lastly, taxpayers should ensure they have attached their completed Schedule SE with their return.

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