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checkforu2003 said in July 29th, 2008 at 4:19 am

FICA refers to w-2 employment payments made to the Treasury by an employer paying both the employer and employee withholding.
Self employment is reported on a 1099 misc. The amount of tax due is based on the schedule C self employment earnings report where the earnings are matched to business deductions such as mileage and other expenses providing the net earnings.

The net earnings are attached to a schedule SE for self employment tax. Net earnings multiplied by .09235 multiplied X 15.3% on net earnings up to and including $87,900. Medicare tax of 2.9 % of net SE income applies with no limit on which the medicare is applied.

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Molly said in July 29th, 2008 at 6:38 am

The above answer is mostly correct with exceptions to the limits.

For 2005 the social security tax base was $90,000 (not $87.900)
For 2005 the base is $94,200

These amounts are indexed for inflation and change each year.

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