Hi Schmoe3,
No, it is a circular calculation. The calculation for income tax in your example is incorrect because you get to take a deduction for half of the self employment taxes you owe before calculating the 10%. Therefore, assuming you were saying your SE taxes were 2,000 then you would have done total income 30,000 - 1,000 (half of your SE tax) = 29,000 before calculating the income tax portion. I've included links to Sch C and the Form 1040, if you look at line 27 on Form 1040 you will see the deduction for 1/2 of SE tax.
Also, there are a few other pieces you are missing. The SE tax is on 92.35% of your net self employment income. Net self employment income is all related revenue minus applicable deductions.
Then to elaborate on the SE tax percentage, it is only 15.3% on the first $113,700 of income. After that the tax is only 2.9%, which is medicare. This year this is an additional medicare tax of .9% that is applicable on income levels over 250,000 for married taxpayers or 200,000 for single taxpayers.
For reference, please refer to the following IRS resources:
http://www.irs.gov/pub/irs-pdf/f1040sc.pdfhttp://www.irs.gov/pub/irs-pdf/f1040.pdf
Let me know if you have additional questions. Thank you for choosing TurboTax!
Amanda
