Internal Revenue Service United States Department of the Treasury
Level Basic Advanced Military International

Self-Employment

Summary and Exercises

Summary

This topic explained how to calculate the self-employment tax for residents of Puerto Rico who earned self-employment income in Puerto Rico.

  • Self-employment tax is a social security and Medicare tax primarily for people who work for themselves, intend to make a profit, and have net earnings from self-employment of $400 or more
  • There are three methods used to compute self-employment tax:
    • Regular method
    • Nonfarm optional method
    • Farm optional method