FICA stands for The Federal Insurance Contributions Act. FICA taxes are made up of Social Security (SS) and Medicare taxes.
FICA taxes total 15.3% of each dollar earned up to certain thresholds. When you are employed, you pay one half of the total FICA taxes through payroll withholding and your employer pays the other one half of FICA taxes on your behalf.
Of the 15.3%, SS makes up 12.4% and Medicare makes up 2.9%.
The SS portion of FICA taxes will be phased out once your income exceeds $128,400 for 2018. This means that if you have earned income in excess of $128,400, the amount in excess of $128,400 will only be subject to Medicare taxes. Medicare taxes do not phase out.
When you are self-employed, you must pay the entire 15.3% of FICA taxes on your earned income. You are able to take a deduction for one half of the total FICA taxes you paid. You will generally report this deduction on Form 1040 or Form 1120-S.