It depends. If this was your total self employment income then the self employment tax would be much less. If you entered any housing allowance, this might be the difference. As a reminder, housing allowance is not subject to personal income tax, however it is subject to self employment tax.
The self employment net profit is first allowed to be reduced for 7.65% (1.0 - .0765 = .9235), this is then multiplied by the net profit to arrive at the amount subject to self employment tax ($500 x .9235= $462). The balance is taxed as follows:
- $462 x 12.4% for social security tax = $57.28
- $462 x 2.9% for medicare tax = $13.40
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