Self-Employed Workers Face 12.4% Social Security Tax Hit in 2026. Here's How to Cut It

"Self-employed individuals face a total self-employment tax of 15.3%, which includes 12.4% for Social Security and 2.9% for Medicare, leading to higher tax bills compared to W-2 workers."

"On $100,000 in self-employment income, the total self-employment tax is $15,300, but half can be deducted, reducing the effective cost to approximately $12,800."

"Income above $184,500 is not subject to Social Security tax, but Medicare tax applies without a cap, which can lower the effective tax rate for high earners."

Self-employed individuals are responsible for a total of 15.3% in self-employment taxes, which includes 12.4% for Social Security and 2.9% for Medicare. This tax burden can be significantly higher than that of W-2 workers, as they pay both the employee and employer shares. For example, on $100,000 in income, the total self-employment tax amounts to $15,300, though half can be deducted. Income above $184,500 is exempt from Social Security tax, but Medicare tax applies without a cap, affecting higher earners differently.

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