What is the tax treatment for self-employment income?

@london_lueilwitz 

Self-employment income is subject to a different tax treatment than regular employment income. Here are some key points regarding the tax treatment for self-employment income:

1. Self-Employment Tax: Self-employed individuals are responsible for paying both the employer and employee portions of Social Security and Medicare taxes known as the self-employment tax. The current self-employment tax rate is 15.3% (12.4% for Social Security and 2.9% for Medicare).
2. Estimated Tax Payments: Since self-employed individuals do not have taxes withheld from their income like regular employees, they are required to make quarterly estimated tax payments to cover their tax liability. Failure to do so may result in penalties and interest.
3. Income Tax Rate: The income earned through self-employment is also subject to federal income tax. The tax rate varies based on the individual's overall income, filing status, and applicable tax bracket.
4. Deductions and Credits: Self-employed individuals may be eligible for various business deductions and credits. These can include expenses related to operating the business, home office deductions, health insurance premiums, and more.
5. Self-Employment Retirement Plans: Self-employed individuals have the option to set up retirement plans, such as a Simplified Employee Pension (SEP) IRA or a Solo 401(k), which offer potential tax advantages by allowing for tax-deferred contributions and potential tax-free growth.

It is recommended to consult with a tax professional or accountant for guidance on your specific self-employment tax situation as rules and regulations may vary based on your location and circumstances.