California Comments On the Self Employment Tax

Here is a thoughtful response to the self employment tax from a senior who is self employed.
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I sure don't love the self employment tax for seniors employment, but there are ways to reduce its effect. 

1) The employer part of the tax is adjustable on 1040 Line 27. You pay the self employment tax on 1040 Schedule SE and then the employer portion of the tax you paid on Schedule SE is adjusted away on 1040 Line 27. So the fiscal effect of the self employment tax is not 14.XX % of the self employment income.   

2) Heath care expenses for seniors are normally not deductible on 1040 Schedule B unless those expenses exceed 7.5% of adjusted gross income. And if you make enough money, that deduction is likely to be reduced or eliminated by the Alternative Minimum Tax (ATM). However, if you have your own business and pay the self employment taxes, you are also allowed to take the self-employed health insurance deduction on 1040 line 29. This is actually not a deduction ( the IRS uses the word deduction) but rather an adjustment to gross income that has the effect of reducing adjusted gross income. You can deduct the cost of health insurance, Medicare Part D  insurance for pills and even long term care insurance costs. Read the rules carefully  -- there are limits. In my case, the health care insurance adjustment on 1040 Line 29 effectively offsets the self employment tax I am paying on Schedule SE.   

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These are valuable insights into the tax.