Sign Up

Why sign in to the Community?

  • Submit a question
  • Check your notifications
or and start working on your taxes
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
Privacy Settings
v