It's my understanding that I am taxed at a 15.3% rate (up to $137,000 +2.9% on income levels above that for a total of 18.2%).
I started my return, have yet to put in Deductions or info (though some was carried over automatically from last year for the following numbers...
Gross sales for my business was $213,861 as reported from a 1099K, it then updated to $54,511 which is about 25.5%. Looking further at the details, TurboTax is showing the math as:
Income and Adjustments: $202,757
Deductions: $18,350
Taxable Income: $160,055
Total Tax: $53,933
Total Payments: $0
Refund/Tax Due: $-54,511
With a taxable income of $160,055, and tax of $53,933, that's effectively a tax rate of 33.7%, far above what I would expect (I'm divorced, head-of-household filer if that helps to know). I know I still have deductions to add, expenses for the business and such, but the tax rate alone just seems WRONG. I questioned it last year and went to a professional to check everything and they pretty much verified TurboTax's number to a similar number.
The question would be how is that being taxed at a self-employment rate? Am I doing something wrong, or is there a setting I'm missing? Based on everything this year, I'm expecting to be taxed on about $70,000, but at 15.3%, not 33%. Can anyone help, please?
