Self-Employment Tax Explained: The 15.3% Coaches Pay (11.5.1)

Описание: Self-employment tax is the line that catches every newly self-employed coach off guard, because as a W-2 employee they never saw it as a separate number. Fifteen point three percent. On a separate track from income tax. It applies to every dollar of self-employment earnings up to the Social Security wage base, and the Medicare portion keeps going without a cap. The S-corp election exists primarily as a mechanism to reduce this single tax line.

Walks the composition — 12.4% Social Security plus 2.9% Medicare plus an Additional Medicare surtax above $200k. What SE tax actually applies to in sole prop vs. S-corp. The half-of-SE-tax deduction that takes some sting out of income tax but doesn't reduce SE tax itself. Then the savings math comparing sole prop and S-corp at $100k and $120k of net income.

Chapters:
0:00 SE Tax: The 15.3% Coaches Miss
0:49 SE Tax Runs on a Separate Track
1:42 Composition: SS Cap Plus Medicare
2:40 What SE Tax Applies To by Entity
3:36 Half-of-SE-Tax Deduction Explained
4:32 S-Corp Savings Math at $100K
5:33 What Happens Above the SS Wage Base
6:29 Sole Prop vs S-Corp at $120K
7:29 Run Your Own Numbers Now

In this lesson:
• Why SE tax runs on a separate track from income tax (and most first-year coaches don't realize they owe both)
• The composition — 12.4% SS up to the wage base ($168,600 for 2024), 2.9% Medicare uncapped, additional surtax above $200k
• What SE tax applies to — 100% of Schedule C profit (× 92.35% factor) vs. S-corp salary only
• The SE-tax deduction — reduces income-tax base, not SE tax itself
• The S-corp savings math worked through with illustrative numbers
• What happens to the math above the SS wage base — additional savings diminish on the 12.4% portion
• Sole prop vs. S-corp worked at $120k net — the dollar gap on the page

About the course
Setting Up Your Coaching Practice is the entry course in The Practitioner Series — async ICF Continuing Coach Education specializations for credentialed and pre-credentialed coaches. 21 modules, 171 videos, fully self-paced. Covers everything from forming the entity through year-one tax filing.

Framework: Coach as Founder — the identity shift from a coach who is starting a business to a founder who builds the operational foundation a coaching practice runs on.

ICF CCE eligible: ~20 hours (4 Core Competency + 16 Resource Development) — bracket pending Phase 10 submission.

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