FICA (Self-Employment Tax)
Federal Insurance Contributions Act tax — Social Security (6.2%) plus Medicare (1.45%) — paid on wages by both employee and employer (total 15.3%). Self-employed individuals (sole props, single-member LLCs, partnerships) pay both halves themselves as self-employment tax. Social Security portion caps at $168,600 (2024); Medicare has no cap but adds 0.9% on income above $200K single / $250K joint. Avoiding FICA on the distribution portion of income is the #1 reason high-earning service businesses elect S-Corp status.
Where This Matters
Legal strategies to reduce business and personal tax burden — entity optimization, deferred compensation, retirement planning, California-specific tactics.
Choosing and setting up the right business structure — LLC, S-Corp, C-Corp, partnership — with California-specific tax implications and long-term planning.
Specialized business management for entertainers, athletes, executives, and high-net-worth individuals — wealth protection, tax strategy, and fraud prevention.
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