Do I Have to Pay Self-Employment/FICA Taxes If I Think Social Security Will Go Bankrupt?

The short answer to the question posed in the title of this post is “yes.”

Image courtesy of user Geralt on
Image courtesy of user Geralt on

The question was asked to me during a presentation I was giving to a group of entrepreneurs. I was talking about how sole proprietors pay self-employment tax and how it’s a similar concept to FICA taxes.

One of the audience members asked if she had to pay that tax if she thought Social Security would be bankrupt by the time she retires.

The answer is yes, you have to pay self-employment or FICA taxes.

There is one exception, where a person can opt out of paying these taxes (but this means not receiving benefits later on). This exception only applies to members of the clergy and members of certain religious sects.

For more information about this, consult IRS Publication 517 (Social Security and Other Information for Members of the Clergy and Religious Workers), Form 4029 (Application for Exemption From Social Security and Medicare Taxes and Waiver of Benefits) and Form 4361 (Application for Exemption From Self-Employment Tax for Use by Ministers, Members of Religious Orders and Christian Science Practitioners).