The $638 is self-employment tax. You do not owe any income tax, but you have to pay self-employment tax on your business income. They are two separate taxes. "Taxable income" means income that is subject to income tax. Self-employment tax is the equivalent of the Social Security and Medicare taxes that would be withheld from your pay if you were an employee instead of self-employed.
Thank you rjs. That sounds right, I guess I was a little confused because the "Fed tax Due" status box shows the $638 in red at the top of the screen on the program. I'll finish the state and see how it all comes out.
Thank you DoninGA. That sounds right, I guess I was a little confused because the "Fed tax Due" status box shows the $638 in red at the top of the screen on the program. I'll finish the state and see how it all comes out.
