Who Pays Self-Employment Tax?
Taxpayers pay self-employment (SE) tax when net earnings from self-employment are $400 or more. A taxpayer is self employed if he or she carries on a trade or business as a sole proprietor (including farmers) or as a general partner in a partnership. A trade or business generally is an activity carried on for a livelihood or in good faith to make a profit. Facts and circumstances determine whether or not an activity is a trade or business.