Michigan self employment tax is an amount paid to cover Social Security and Medicare, to a total of 15.3%. Social Security is 12.4% and Medicare is 2.9%.
Michigan self employment tax rate is also calculated separately for the two payments. The Social Security amount is applied to a set amount every year, and for 2020, the 12.4% will be applied to the first $137,700 of your net earnings. The 2.9% Medicare amount is applied to all your combined net earnings. If you operate a married couples business, tax requirements may vary.
When you work for an employer, they withhold taxes from your cheques. When you’re the boss, you’re required to pay Michigan self employment tax on a quarterly basis. Estimated tax payments must be made on:
Payments can be made electronically with Form 1040-ES, Estimated Tax for Individuals. Use the worksheet in Form 1040-ES to find out if you are required to file quarterly estimated tax.