Tax Software Example-Adjustment For Adjusted Gross Income (AGI) Half of Self-Employment

Deduction of one half of self-employment tax adjustment for adjusted gross income for the income tax year 2018 2019.

If we have business income we will often have to pay self employment tax in addition to federal income tax. Self employment tax is social security and medicare, and is similar to payroll taxes we pay when we are a W-2 employees.
As a sole proprietor we generally have a self employment tax rate of twice the amount we pay as w-2 employee, because as a sole proprietor we are basically both employee and employer.
We then get to deduct half the self employment tax as an adjustment for adjusted gross income.
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