IRS Schedule SE Form 1040 (2018): Self-Employment Tax Form

IRS Schedule SE is the official form self-employed individuals generally use to calculate self-employment tax covering Social Security and Medicare for 2018. It applies to freelancers, contractors, and single-member LLC owners with net earnings of $400 or more. Late filers must use this specific 2018 form.

Late Filers

The 2018 filing deadline was April 15, 2019. File Schedule SE if the relevant line amount is $400 or more.

Multiple Income Sources 

Self-employed individuals with earnings from self-employment — including freelance work, Schedule C, and farm self-employment — must report all qualifying income sources on Schedule SE.

Itemizing Deductions 

Schedule SE enables you to take an income tax deduction for half your self-employment tax on Form 1040, reducing taxable income for 2018.

Claiming the 2018 Credits

Filing Schedule SE accurately may affect your eligibility for the earned income tax credit, dependent care credit, and additional child tax credit for 2018.

IRS Compliance 

Schedule SE figures self-employment tax due on net earnings. The Social Security Administration uses this data to compute future benefits.

Citizens Abroad / Military 

U.S. citizens abroad and active military with self-employment income of $400 or more must still pay SE tax by filing Schedule SE for 2018.

‍

Follow these six steps to complete your 2018 Schedule SE accurately and fulfill your tax obligations. Some steps reflect rules and requirements specific to the 2018 tax year.

1. Gather Your Documents Before Starting

Collect your Schedule C, Schedule F, and any other documents showing self-employment income or losses for 2018. You will also need records of business expenses to figure out net earnings before applying the self-employment tax rate.

2. Choose the Correct Filing Status [2018 Only]

Your Form 1040 filing status — single, married filing jointly, married filing separately, head of household, or qualifying widow(er) — affects thresholds for the additional Medicare tax. [2018 Only] Each spouse reporting self-employment income must complete a separate Schedule SE; combining spousal earnings on a single form distorts both the employee and employer tax calculations.

3. Report All Income on the Correct Lines

Transfer net profit from Schedule C (line 31) to Schedule SE, Section A, line 2. Enter farm profit or loss from Schedule F (line 34) on line 1a. Use Long Schedule SE for church employee income of $108.28 or more. Not all amounts qualify; check the 2018 instructions for exclusions.

4. Calculate Adjusted Gross Income (AGI)

After calculating your self-employment tax on Schedule SE, you may claim an income tax deduction for one-half of that amount on Schedule 1 (Form 1040), line 27. This above-the-line adjustment reduces your taxable income and AGI, affecting your eligibility for credits and income-based phase-outs.

5. Choose Your Deductions and Apply Exemptions [2018 Only]

For 2018, standard deduction amounts were $12,000 for single or married filing separately, $24,000 for married filing jointly or qualifying widow(er), and $18,000 for head of household. The deductible part of self-employment tax and self-employed health insurance premiums are Schedule 1 adjustments, applied regardless of whether you itemize.

6. Claim the 2018-Specific Deduction [2018 Only]

The 2018 QBI deduction lets eligible self-employed taxpayers deduct up to 20% of qualified business income, subject to limits. Use the 2018 Form 1040 simplified worksheet or Publication 535 Worksheet 12-A; no separate 2018 IRS form existed.

‍

Missing W-2s or Tax Records for 2018?

Late filers often lack original income documents from the 2018 tax year, including 1099s and records of self-employment net income. IRS transcripts and Social Security Administration records can help you reconstruct earnings information needed for income tax purposes.

IRS Wage & Income Transcript

This transcript shows data from IRS information returns — such as Forms W-2, 1099, and 5498 — but does not show net self-employment earnings from Schedule C or SE.

IRS Account Transcript

The IRS account transcript displays your filing history, payments made, penalties assessed, and credits applied to your 2018 tax account, helping you verify what was previously reported to the IRS.

Social Security Administration

SSA may require Schedule C and Schedule SE as evidence of self-employment income. Request your SSA earnings record to verify what was credited for 2018.

Contact Prior Employers

Contact prior payers or clients for copies of Forms 1099 or other payment records from 2018 to help reconstruct your self-employment income as accurately as possible.

Use business records, prior tax-return schedules, and available IRS transcript information to reconstruct income; IRS transcripts alone do not show exact net self-employment income.

‍

These are the most frequent errors that cause IRS delays, rejected returns, or missed deductions on 2018 Schedule SE filings.

• Using the wrong tax year form — Submitting a Schedule SE from any year other than 2018 causes IRS rejection and requires refiling the entire return from scratch.
  
  
• Missing 2018 QBI Deduction — The QBI deduction was new for 2018; overlooking it could mean missing a deduction of up to 20% of qualified business income, subject to the applicable limitations.
  
  
• Wrong filing status label — Each spouse with self-employment income must complete a separate Schedule SE; combining spousal earnings on one form produces an incorrect tax calculation.
  
  
• Applying Pease limitations incorrectly — The Pease limitation was suspended for 2018 under TCJA; applying it incorrectly understates allowable deductions and inflates total tax liability.
  
  
• Treating unemployment compensation as partially tax-free — Unemployment benefits are not subject to self-employment tax; erroneously including them in your Schedule SE calculation overstates tax liability for 2018.
  
  
• Assuming a refund is still available — Refund eligibility depends on the later of 3 years from filing or 2 years from paying; consult a professional first.
  
  
• Missing or incorrect Social Security numbers — An incorrect or missing Social Security number on Schedule SE prevents the IRS from crediting earnings to your Social Security account, delaying processing.
  
  
• Unsigned return — A Form 1040 submitted without a signature is legally invalid; the IRS will return unsigned documents and require resubmission before any processing begins.
  
  
• Missing attachments — Omitting required attachments like Schedule C or Schedule F from your 2018 return causes processing delays and IRS requests for additional documentation.

‍

What is IRS Schedule SE (Form 1040) (2018) used for? 

IRS Schedule SE (Form 1040) for 2018 is used to figure the self-employment tax owed by freelancers, sole proprietors, independent contractors, and small business owners. It covers both the employee and employer portions of Social Security and Medicare taxes, which self-employed individuals must pay since no employer withholds these contributions.

Can I still file a 2018 Schedule SE? 

Yes, the IRS accepts late prior-year returns, including Schedule SE for 2018. Refund eligibility depends on the later of 3 years from filing or 2 years from paying the tax, with exceptions — consult a professional. Self-employed people who owe taxes should file now to stop ongoing failure-to-file penalties from increasing further.

What is the self-employment tax rate for 2018? 

For 2018, the self-employment tax is generally calculated on 92.35% of net earnings. Social Security tax is 12.4% up to the wage base, while Medicare tax is 2.9% on all net earnings. Additional Medicare tax may apply separately on Form 8959.

Do I need to file Schedule SE if I earned less than $400 from self-employment? 

Generally, no self-employment tax is owed if the relevant Schedule SE amount is under $400. However, special rules apply, including church employee income of $108.28 or more and optional methods that may affect Social Security coverage. Consult IRS instructions before assuming you are not required to file.

What is the 92.35% multiplier on Schedule SE? 

Before applying the 15.3% self-employment tax rate, you multiply your net earnings by 92.35%. You can use a self-employment tax calculator to simplify calculating net earnings. This adjustment reflects that self-employed individuals bear both the employee and employer share of FICA.

Can I deduct half of my self-employment tax on my 2018 return? 

Yes, after completing Schedule SE, you may claim an income tax deduction for the deductible part of self-employment tax on Schedule 1 (Form 1040), line 27. Under the tax code, this above-the-line adjustment reduces your taxable income for 2018, lowering your liability and affecting eligibility for certain credits and deductions.

What is the difference between the Short Schedule SE and the Long Schedule SE? 

Short Schedule SE applies when taxpayers meet the form’s flowchart conditions. For 2018, Long Schedule SE is required for certain church employee income, optional methods, or wage and self-employment income combinations above the Social Security wage base. Use the flowchart to confirm.

How does filing Schedule SE affect my Social Security benefits? 

The self-employment earnings reported on Schedule SE are submitted to the Social Security Administration to calculate your Social Security retirement and Medicare benefits. Accurately filing your 2018 Schedule SE ensures those earnings are properly credited toward your Social Security account and lifetime benefit record.

‍