Temporary Decrease in Self Employment Taxes

6/6/2011 - By Staff Writer

Did you know for 2011 the FICA portion of self-employment tax has decreased 2% for 2011? The temporary rate is 10.4% (down from 12.4%) up to the social security limit of $106,800 on net earnings from self-employment. If you expect to owe at least $1,000 in tax for 2011 after taxes withheld, you are generally expected to pay quarterly estimated tax payments. If you base your quarterly estimated tax payments on 90% of the tax expected to be shown on your 2011 tax return, you may be able to reduce your quarterly estimated tax based on your net income from self-employment by the 2% temporary FICA tax reduction. Consult your tax advisor to see if you can reduce your quarterly estimated tax payments.