Is this correct? I understand I pay 15.3% for miscellaneous income, but the federal tax due is over $700 greater when I add in this income, as opposed to 15.3% ($321).
The 15.3% is self-employment tax. That's the equivalent, for someone who is self-employed, of the Social Security and Medicare taxes that would be deducted from your pay if you were an employee. But self-employment tax is not income tax. You also pay regular income tax on your self-employment income. The total tax due is the income tax plus self-employment tax.
The 15.3% Self Employment tax is in addition to any regular income tax you owe on all your income. Plus adding more income might reduce any credits you had like the EIC. What other lines changed?
Self-employment income is subject to self-employment tax (about 14.8% net because there is an offsetting deduction, its complicated) AND ALSO regular income tax, which might be 15%, 22%, or more, depending on your total income.
