My consulting income seems to be taxed as part of my Adjusted Gross Income (line 37) but then again on line 57. Does this mean I pay regular income tax AND a Business income tax?
No, you're not being double taxed, but you are paying two separate types of taxes.
Line 12 for the 1040 shows the net profit of your business after expenses. You pay ordinary income tax on "most" of this, as if it was wages. You will also pay SE tax on this which is Line 57.
Self-employment tax (SE tax) is the Social Security and Medicare tax paid by self-employed individuals. It is similar to FICA which is the Social Security and Medicare taxes withheld from an employee’s paycheck.
When you’re self-employed, you are paid the full amount you earn. Nothing is deducted from your check for Social Security and Medicare taxes.
If you’re self-employed, you can claim a federal deduction for half the SE tax you pay, which can help lower your taxes. You see this on Line 27, 1040 and reduces your AGI slightly.
The SE tax rate is 15.3% with 12.4% for Social Security and 2.9% for Medicare which happens to be double what it taken out of an employees paycheck. The employer also matches what is taken from your pay. As a Self-Employed, you are your own employer and own employee, so you pay the whole 15.3%.
TurboTax reports your SE tax on Schedule SE and also calculate the deduction that goes along with it.
No, you're not being double taxed, but you are paying two separate types of taxes.
Line 12 for the 1040 shows the net profit of your business after expenses. You pay ordinary income tax on "most" of this, as if it was wages. You will also pay SE tax on this which is Line 57.
Self-employment tax (SE tax) is the Social Security and Medicare tax paid by self-employed individuals. It is similar to FICA which is the Social Security and Medicare taxes withheld from an employee’s paycheck.
When you’re self-employed, you are paid the full amount you earn. Nothing is deducted from your check for Social Security and Medicare taxes.
If you’re self-employed, you can claim a federal deduction for half the SE tax you pay, which can help lower your taxes. You see this on Line 27, 1040 and reduces your AGI slightly.
The SE tax rate is 15.3% with 12.4% for Social Security and 2.9% for Medicare which happens to be double what it taken out of an employees paycheck. The employer also matches what is taken from your pay. As a Self-Employed, you are your own employer and own employee, so you pay the whole 15.3%.
TurboTax reports your SE tax on Schedule SE and also calculate the deduction that goes along with it.