Isn’t self-employed is considered tax as an employee and an employer, so that we pay double tax as a self-employed? Yes but no ... you do pay both the employer & employee portions of the FICA taxes however you are given a deduction for the employer's portion so you don't have to pay income tax on that portion. Review the entire return to see how that happens.
what I still don’t understand is how come EV tax credit don’t offset the tax liability since TT shows that part of the federal tax I owe to the IRS? Again ... the EV credit can only offset federal income tax and not the SE taxes the IRS is collecting for the SS administration on the return. This is the same thing as an employee ... the FICA taxes are withheld from the gross pay and sent to SS by the employer along with the employer's portion. This is the same thing that happens for the self employed on the tax return. The employee cannot use the EV credit to pay the FICA taxes that were withheld from their paycheck so why do you believe you should get different tax treatment? If this still is confusing to you then you probably need to talk to a local tax pro who can explain it better but the EV credit still cannot and will not cover the SE taxes on your return.
