Yes, you do pay the full rate for the SE tax on the Net Self-Employment income. There is a deduction for some of the SE tax in arriving at taxable income.
Without knowing your full taxable situation, but based only on the $20K, your tax rate should be no higher than 12%, and after standard deduction; you should probably be in the 10% bracket. Or, some in 10 and some in 12.
So, if $20K is your income, standard deduction is $12,550, leaving about $7,450 for taxable income. Less a deduction for SE tax (1,413), no should have no more than $603 in federal income tax.
Assuming $20K is SE income, you pay SE tax on $18,470, which is then about $2,825
You would get a deduction of 50% of that amount to calculate taxable income.
All of the above is based on net SE income of $20,000 and no other income and not figuring if you qualify for any credits, etc. Effective rate then on $20K is for both SE tax and income tax is about 17%.
**Disclaimer: Effort has been made to offer correct information; but due to the discussion forum limitations, the poster disclaims any legal responsibility for the accuracy of the poster's response**
