Adding income to your return can have a domino effect.
While the SE tax on that would be $85, you have to also consider:
-regular income tax. If your regular tax is a "typical" 15%,that would be about $90. We can't see your return, so obviously your tax rate can be higher or lower than this.
-the impact on income-based tax credits, like the Earned Income Credit, Child Tax Credit, IRA deduction, student loan interest deduction, and much more. Almost all deductions and credits are negatively impacted by adding income. A small amount could have a large impact.
If your SE tax is $85, that means you have no expenses. I would recommend that you make the amount in the 1099-MISC $0 and analyze the numbers on your tax return (i.e. write them down). Put the $600 back on the 1099-MISC and do the same thing. You can't figure out all the differences without looking at your tax return - there are too many possible impacts from adding income.
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My Account
- Tools
- View Tax Summary
- Preview 1040
- Look at deductions, credits and other pertinent items on your return to see how this "domino effect" played out
