Important ChangesTax rates and maximum net earnings. The self-employment tax rate on net earnings remains the same for 2001 and 2002. This rate, 15.3%, is a total of 12.4% for social security (old-age, survivors, and disability insurance) and 2.9% for Medicare (hospital insurance). The maximum amount subject to the social security part for tax years beginning in 2001 is $80,400. For 2002, that amount increases to $84,900. All net earnings of at least $400 are subject to the Medicare part. Revocation of religious exemption. Ministers, members of religious orders not under vows of poverty, and Christian Science practitioners who previously elected exemption from social security coverage and self-employment tax now have a limited period of time to revoke that exemption. For more information, see Revocation of exemption from SE tax later under Minister, Christian Science Practitioner, or Member of Religious Order. |