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History of Self-Employment Tax Rates: 1951-2015

Did you know that the self-employment tax rate was a mere 2.25% on $3,600 from 1951-1953 for a total tax of $81.00. Back then, Medicare did not exist.

 

Low tax rates never seem to stick. It might be the camel’s nose under the tent theory. You know, once the camel gets its nose under the tent, the next thing you know is that you have the camel in the tent.

 

The self-employment tax very much follows the camel theory starting at a maximum of $81 in 1951 and growing to a 2015 maximum of $18,130.50, plus 2.9 percent on any excess above $118,500.1

 

Furthermore, since 2013, if you make over $200,000 ($250,000 for Married Filing Joint and $125,000 for Married Filing Separately) in net self-employment earnings, the federal government will tack on another 0.9% additional Medicare tax.

 

Watch the Taxes Increase

 

Practical Resources for You

 

You can reduce your self-employment tax bite by finding more business deductions.

 

Where would you find more business deductions? Answer: With Tax Reduction Letter at www.bradfordtaxinstitute.com.

 

If you already subscribe to Tax Reduction Letter, CLICK HERE to log in.

 

If you are not yet a subscriber, CLICK HERE. You'll get a no-obligation 7-day FREE trial during which you can read our helpful tax saving tips from the last two months. This trial is absolutely free and there are no strings attached.

 

You calculate your self-employment tax on Schedule SE of IRS Form 1040. If you have that urge at the moment, click here to access the form.

 

Self Employment Tax Rates: 1951-2015

Year

Social Security (SS) Tax (%)

Medicare Tax (%)

Total (%)

Max Earnings Subject to SS Self-Employment Tax

Total Tax

1951

2.250

0.00

2.250

$3,600

$81.00

1952

2.250

0.00

2.250

$3,600

$81.00

1953

2.250

0.00

2.250

$3,600

$81.00

1954

3.000

0.00

3.000

$3,600

$108.00

1955

3.000

0.00

3.000

$4,200

$126.00

1956

3.000

0.00

3.000

$4,200

$126.00

1957

3.375

0.00

3.375

$4,200

$141.75

1958

3.375

0.00

3.375

$4,200

$141.75

1959

3.750

0.00

3.750

$4,800

$162.00

1960

4.500

0.00

4.500

$4,800

$216.00

1961

4.500

0.00

4.500

$4,800

$216.00

1962

4.700

0.00

4.700

$4,800

$225.60

1963

5.400

0.00

5.400

$4,800

$259.20

1964

5.400

0.00

5.400

$4,800

$259.20

1965

5.400

0.00

5.400

$4,800

$259.20

1966

5.800

0.35

6.150

$6,600

$405.90

1967

5.900

0.50

6.400

$6,600

$422.40

1968

5.800

0.60

6.400

$7,800

$499.20

1969

6.300

0.60

6.900

$7,800

$538.20

1970

6.300

0.60

6.900

$7,800

$538.20

1971

6.900

0.60

7.500

$7,800

$585.00

1972

6.900

0.60

7.500

$9,000

$675.00

1973

7.000

1.00

8.000

$10,800

$864.00

1974

7.000

0.90

7.900

$13,200

$1,042.80

1975

7.000

0.90

7.900

$14,100

$1,113.90

1976

7.000

0.90

7.900

$15,300

$1,208.70

1977

7.000

0.90

7.900

$16,500

$1,303.50

1978

7.100

1.00

8.100

$17,700

$1,433.70

1979

7.050

1.05

8.100

$22,900

$1,854.90

1980

7.050

1.05

8.100

$25,900

$2,097.90

1981

8.000

1.30

9.300

$29,700

$2,762.10

1982

8.050

1.30

9.350

$32,400

$3,029.40

1983

8.050

1.30

9.350

$35,700

$3,337.95

1984

8.700

2.60

11.30

$37,800

$4,271.40

1985

9.100

2.70

11.80

$39,600

$4,672.80

1986

9.400

2.90

12.30

$42,000

$5,166.00

1987

9.400

2.90

12.30

$43,800

$5,387.40

1988

10.12

2.90

13.02

$45,000

$5,859.00

1989

10.12

2.90

13.02

$48,000

$6,249.60

1990

12.40

2.90

15.30

$51,300

$7,848.90

1991

12.40

2.90

15.30

$53,400

$8,170.20

1992

12.40

2.90

15.30

$55,500

$8,491.50

1993

12.40

2.90

15.30

$57,600

$8,812.80

1994

12.40

2.90

15.30

$60,600

$9,271.80

1995

12.40

2.90

15.30

$61,200

$9,363.60

1996

12.40

2.90

15.30

$62,700

$9,593.10

1997

12.40

2.90

15.30

$65,400

$10,006.20

1998

12.40

2.90

15.30

$68,400

$10,465.20

1999

12.40

2.90

15.30

$72,600

$11,107.80

2000

12.40

2.90

15.30

$76,200

$11,658.60

2001

12.40

2.90

15.30

$80,400

$12,301.20

2002

12.40

2.90

15.30

$84,900

$12,989.70

2003

12.40

2.90

15.30

$87,000

$13,311.00

2004

12.40

2.90

15.30

$87,900

$13,448.70

2005

12.40

2.90

15.30

$90,000

$13,770.00

2006

12.40

2.90

15.30

$94,200

$14,412.60

2007

12.40

2.90

15.30

$97,500

$14,917.50

2008

12.40

2.90

15.30

$102,000

$15,606.00

2009

12.40

2.90

15.30

$106,800

$16,340.40

2010

12.40

2.90

15.30

$106,800

$16,340.40

2011

10.40

2.90

13.30

$106,800

$14,204.40

2012

10.40

2.90

13.30

$110,100

$14,643.30

2013

12.40

2.90

15.30

$113,700

$17,396.10

2014

12.40

2.90

15.30

$117,000

$17,901.00

2015

12.40

2.90

15.30

$118,500

$18,130.50

 

Chart does not take into account any possible 0.9% additional Medicare tax for 2013 – 2015. No part of the 0.9% additional Medicare tax can be used as a self-employment tax adjustment.

 


 

1    Because only 92.35 percent of self-employment income is taxed on Schedule SE, the effective rates of tax are 14.13 percent on self-employment earnings and 2.68 percent on Medicare earnings above the base amount (excluding the new Additional Medicare Tax of 0.9% which does not figure into Schedule SE). Also, because only 92.35 percent of self-employment income is taxed, the true upper limit for the 14.13 percent is $128,316.