Anyone who has their own business is obligated to pay Minnesota self employment tax, which covers Social Security and Medicare. The total Minnesota self employment tax is 15.3%, divided into a Social Security amount of 12.4% and a Medicare amount of 2.9%.
If you have to pay Minnesota self employment tax, there are two calculations. The first is the 12.4% of Social Security applied against a set amount, which for 2020 will be the first $137,700 of your net earnings. The second is the 2.9% of Medicare, which is applied to all your combined net earnings. If you have a family business with your spouse, or your spouse works for you, there are some different requirements.
The Minnesota self employment tax must be paid quarterly. A worksheet on the form will help you determine if you are required to file quarterly estimated tax on:
The Minnesota self employment tax form is Form 1040-ES, Estimated Tax for Individuals. You’ll need your previous year’s return or an estimate of your annual earnings.