My taxable income is $4237 an my tax is $2892. How can this be?
Sign Up

Why sign in to the Community?

  • Submit a question
  • Check your notifications
or and start working on your taxes
Announcements
TurboTax has you covered during Covid. Get the latest stimulus info here.
cancel
Showing results for 
Search instead for 
Did you mean: 
wamhofffarms
New Member

My taxable income is $4237 an my tax is $2892. How can this be?

I found a 1099 post filing and went to amend.  In addition, I found that I was not claimed as a dependent on another 1040.  But the resulting tax percent doesn't make sense.  How is a $4,237 taxable income result in a $2,892 due?    something isn't right.  


Please help

2 Replies
StacyC
Level 3

My taxable income is $4237 an my tax is $2892. How can this be?

It sounds like you may have some self-employment tax being calculated on your tax return. 

Self-employment tax is 15.3% on your independent contractor, self-employment or business income. If you had significant income from 1099-MISC forms you would be taxed at 15.3% on this income after subtracting any expenses you had for that income. That's all unrelated to your taxable income. 

To get to your income tax (which is a different tax than your self-employment tax), you use your taxable income. There are other deductions that are taken into account to get to your taxable income like the standard deduction ($12k for single, $24k for married filing jointly) and the qualified business income deduction which is a 20% tax break for income taxes. 

So even if your taxable income and income tax is really low, you could have substantial self-employment tax due. 

SweetieJean
Level 15

My taxable income is $4237 an my tax is $2892. How can this be?

Any increase in income can also lower some deductions/credits, and make more of any Social Security benefits taxable/.
Dynamic AdsDynamic Ads
v
Privacy Settings