Which tax is commonly levied on self-employed individuals?

Self-employment tax is a specific tax that is imposed on individuals who work for themselves, as it encompasses Social Security and Medicare taxes. When someone is self-employed, they must pay both the employee's and the employer's portions of these taxes, which amounts to a total of 15.3% on their net earnings. This tax is designed to ensure that self-employed individuals contribute to the federal social insurance programs just like traditional employees, whose taxes are automatically withheld by their employers.

The self-employment tax is reported on the individual's tax return and is critical for ensuring access to Social Security benefits in retirement and Medicare coverage. Understanding this tax is fundamental for self-employed individuals, as it directly impacts their overall tax liability and financial planning.

Other taxes like income tax apply universally to all individuals earning income, regardless of employment type, while employment tax is more relevant to employers with employees rather than to self-employed individuals. Property tax pertains to real estate ownership, which is not directly linked to self-employment status. Thus, self-employment tax is uniquely relevant to those in self-employed positions, making it the correct answer in this context.