What is the most common method for computing self-employment tax?

The most common method for computing self-employment tax is the regular method. This method is defined in the tax code and involves calculating net earnings from self-employment, which is generally derived from income earned minus allowable business deductions. The self-employment tax itself is primarily comprised of Social Security and Medicare taxes for individuals who work for themselves.

Using the regular method, taxpayers report their income and expenses on Schedule C (Profit or Loss from Business) and then use Schedule SE (Self-Employment Tax) to calculate the amount due. This method is standardized and widely recognized for determining the self-employment tax obligation, making it the go-to method for most self-employed individuals.

Alternative, standard, and estimated methods may refer to different approaches or contexts, but the regular method's structured approach aligns with IRS guidelines and provides a straightforward calculation pathway for self-employment tax, which is why it is considered the most common method.