Investopedia

Continue to Site »

Self Employed Contributions Act Tax - SECA Tax

Filed Under »
Dictionary Says

Definition of 'Self Employed Contributions Act Tax - SECA Tax'

A form of taxes that self-employed business owners must pay based on their net earnings from self-employment. Self Employed Contributions Act Tax (SECA Tax) was first imposed by the SEC Act of 1954.

Similar to the Federal Insurance Contributions Act Tax (FICA Tax) that employees pay, the payments fund Social Security, Old Age Survivors and Disability Insurance (OASDI) and Medicare programs.
Investopedia Says

Investopedia explains 'Self Employed Contributions Act Tax - SECA Tax'

The basic tax rate for SECA tax payments is twice the percentage rate that employees pay at source from their paychecks. This is to cover both the employer and employee portion of the payment. The employer portion of the payment, is deductible as a business expense.

If your net earnings are less than the minimum set each year, no SECA Tax is payable. If, however, your net earnings are above the minimum, you must pay SECA Tax on the entire amount (including the amount under the minimum).

Articles Of Interest

  1.

    Surviving The IRS Audit

    Keeping thorough records and knowing the penalties make this experience easier than you'd expect.

  2. Get A 6-Month Tax Extension

    Discover how to get some extra time from the IRS, without paying for the privilege.

  3. Don't Put Off Your Year-End Tax Plan

    From sales tax deductions to credit reports, check out what items should be on your financial checklist.

  4. 10 Tax Benefits For The Self-Employed

    Running your own business has both personal and financial perks.

  5. Do Tax Cuts Stimulate The Economy?

    Learn the logic behind the belief that reducing government income benefits everyone.

  6. Top 9 Solutions To An Unexpected Tax Bill

    Finding out you owe when you expected a refund is a nasty shock. Find out how to cope.

  7. 3 Common Tax Questions Answered

    We clarify some rules that often puzzle taxpayers.

  8. Give Your Taxes Some Credit

    A few tax credits can greatly increase the amount of money you get back on your return.

  9. Cut Your Tax Bill

    Paying your bills early or giving an extra donation now can help you come tax time.

  10. Financial History: The Rise Of Modern Accounting

    Find out how these two have grown hand-in-hand throughout our modern history.
comments powered by Disqus
Marketplace
Hot Definitions

  1. Disaster Loss

    A special type of tax-deductible loss, similar to a casualty loss, where a loss has been incurred by taxpayers who reside in an area that has been designated as a federal disaster area by the President.

  2. Fool In The Shower

    The notion that changes or policies designed to alter the course of the economy should be done slowly, rather than all at once.

  3. Pattern Day Trader

    An SEC designation for traders who trade the same security four or more times per day (buys and sells) over a five-day period, and for whom same-day trades make up at least 6% of their activity for that period.

  4. Cost-Push Inflation

    A phenomenon in which the general price levels rise (inflation) due to increases in the cost of wages and raw materials.

  5. Happiness Economics

    The formal academic study of the relationship between individual satisfaction and economic issues, such as employment and wealth.

  6. Affluenza

    A social condition arising from the desire to be more wealthy, successful or to "keep up with the Joneses." Affluenza is symptomatic of a culture that holds up financial success as one of the highest achievements.
Trading Center