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 Schedule SE, self employment tax? How much is it?
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MaryRod
Star Contributor

El Centro, CA
USA
542 Posts

Posted - 02/22/2008 :  02:55:03 AM  Reply  Reply with Quote
I earned 14,358.00 (gross) as IC after deductions I get 7.140.00 (net) -Schedule SE line 3.

to figure my self employment tax instructions say:

Multiply line 3-net profit with 92.35 (or.9235)
answer on line 4...........(I get 6593.79)

Multiply line 4 with 15.3 (or.153)........(I get 1008.45)

Is this correct I have to pay $1,008.45?

This answer would be my self employment tax- goes on line 58 of the 1040 form.

I also read that if we earned 1.600.00 & over we can not get Earned Income Credit being self employed.
I'm going to call the help line and ask because I also earned 5,353.00 as an employee.

Thank you in advance for helping
Mary

~~ Please consider the environment before printing unnecessary pages.~~
~*~Mary~*~

.Dawn DE
Inactive

DE
USA
518 Posts

Posted - 02/22/2008 :  05:02:50 AM  Reply  Reply with Quote
Don't forget that half of the SE tax gets backed out on the front of the 1040 Line 27, which will lower your AGI by $504.00.

If you are filing MFJ (you said "we", but I wasn't sure) you add all your earned income together for both of you (net self employment plus all W2 wages) and then follow the chart for the earned income credit. It will vary depending on whether or not you have children, and how many.

Dawn
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HeatherFish
Valued Contributor

PA
USA
122 Posts

Posted - 02/22/2008 :  08:29:27 AM  Reply  Reply with Quote
I came up with 1008.84 for you based on those numbers, so that sounds right. It seems like a lot of money, but that is because being self-employed we don't have money for social security and medicare deducted from our pay. Those amounts are 12.4% and 2.9% respectively. As a tradional employee, your employer would pay half of that amount, and the other half would be deducted from your check. Since we are our employer, we pay the whole thing.

Yes, make sure you put your 1/2 self employment tax on line 27 (if using 1040 form). That will reduce your AGI a little which will reduce your total tax due.

I do not know much about Earned Income Credit because I have never personally used that. Where did you read about the $1600 EIC rule? I never heard of that. Did you fill out Worksheet B for EIC?
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MaryRod
Star Contributor

El Centro, CA
USA
542 Posts

Posted - 02/26/2008 :  11:59:18 AM  Reply  Reply with Quote
Thanks, I'm glad I asked here in this forum.
For 'we' I meant us merchandisers, or self employed.

Making it half is not as bad. I didn't know how to fill the forms last year so I need to do both of them this year.

I thought I would be receiving higher Earned Income Credit since I made more income, it just knocked off.
Mary

~~ Please consider the environment before printing unnecessary pages.~~
~*~Mary~*~
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JuanitaJ
Star Contributor

Houston, TX
USA
1082 Posts

Posted - 04/25/2008 :  1:53:07 PM  Reply  Reply with Quote
quote:
Originally posted by MaryRod

Making it half is not as bad. I didn't know how to fill the forms last year so I need to do both of them this year.

I thought I would be receiving higher Earned Income Credit since I made more income, it just knocked off.
You will still need to list the total amount of $1008 on line 58. The 1/2 of that amount which is listed on line 27 is just the amount you will not need to pay federal tax on. It will save you about 10% of the $504 or $50.

Juanita
MSPA Gold Certified
Happily shopping the Houston, TX area.
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RoseRover
Apprentice

Daytona Beach, Florida
USA
2 Posts

Posted - 10/21/2012 :  05:27:09 AM  Reply  Reply with Quote
How important is it to pay self employment taxes quarterly. I was just offered a job where I had to obtain an EIN. There isn't that much money involved to pay taxes quarterly but since I obtained an EIN, the IRS knows that I am an IC.

What I would like to do is just fill out the proper forms (is it Schedule C) and pay the taxes on my yearly Income Tax Forms.

I would appreciate any input anyone has about doing it this way.

Thanks in advance, Rose

Rose
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Laura_In_Az
Star Contributor

Tucson, AZ
USA
307 Posts

Posted - 10/24/2012 :  10:04:50 PM  Reply  Reply with Quote
I am not sure I am answering your question but will comment on my situation. I use Turbo Tax and several years ago, based upon my filing, Turbo Tax had me sending in quarterly estimated required dollars to the IRS. I did this for one year. Since I am also an employee for several companies, I UPPED the amount they took out for taxes. Since then, I don't have to file quarterly because I UPPED the amount the companies that I am an employee for was enough to cover the IC amount I pay each year.
If you are not an employee for any company then you can fall into the situation where you need to send dollars, quarterly, to the IRS for your taxes/medicare payments.
I would rather receive a refund than have to send money each tax return. Especially since Turbo Tax also calculates the penalty for NOT paying enough quarterly. (been there, done that also....)
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