So let's look at your fact pattern for 2023. Self-employed ("SE") net income of $20K. The standard deduction in 2023 was $13,850, so your taxable income was somewhat over $6K. So using that number the income tax was around $600.
With net SE income of $20K, the SE tax is 15.3% of 92.35% of SE income. So the SE tax on this is approximately $2,800. That bring the Federal taxes to around $3,400. I am assuming the number below also includes state taxes, but I am not sure.
The question I have is did you do a good job of tracking your expenses for 2023. SE net income is income less expenses. Track self-employed expenses year-round with TurboTax Expense Monitor
I have a recent graduate of college and a daughter in college now. Being a contractor requires the payment of SE tax, which is the main reason for the tax burden. I would ask you to carefully go over what your expenses are. You can amend the 2023 tax returns if you discover that you did not take a supportable level of expenses.
Thank you so much for your question @mayanataros, and best of luck in whatever schooling remains.
Be well and safe!
Marc T.
Turbo Tax Expert
27 Years of Experience Helping Clients
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