Self-employment Tax Definition
Self-employment taxes are paid by business owners who own an unincorporated business. This includes sole proprietors, independent contractors, partners in a business, and limited liability company (LLC) members.
Self-employment Tax Extended Definition
Taxpayers in the United States are required to contribute Social Security and Medicare taxes. Employees have taxes deducted from their paychecks and employers pay matching taxes.
Self-employed business owners who operate as sole proprietors or as part of a partnership must also contribute to the fund (Social Security tax and Medicare).
Last Updated By
Rachel Blakely-Gray | Apr 18, 2023