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anish007
New Member

Question About 1099-MISC, Medicare and social security tax.

Hello there, I filled out my tax return using Turbotax yesterday. I started my employment from oct 28 2013 and my wife was already employed and she receives her w2. 

In my 1099 i get paid as (no7 box) non employee compensation. As a result No medicare or social security tax's were taken from my pay. 

Now when my tax return is filed, did turbo tax automatically take the social security taxes, medicare taxes? or do i need to send it out separately?

1 Best answer

Accepted Solutions
VolvoGirl
Level 15

Question About 1099-MISC, Medicare and social security tax.

Hopefully your income shows up on the 1040 line 12 and not line 21 for other income.  You should have a schedule C for self employment income.  If you have a net profit of $400 or more you will pay 15.35% SE tax. 

Self Employment tax (Scheduled SE) is automatically generated if a person has $400 or more of net profit from self-employment.  You pay 15.3% for 2013 SE tax on 92.35% of your Net Profit greater than $400.  The 15.3% self employed SE Tax is to pay both the employer part and employee part of Social Security and Medicare.  So you get social security credit for it when you retire.  You do get to take off the 50% ER portion of the SE tax as an adjustment on line 27 of the 1040.  The SE tax is already included in your tax due or reduced your refund.  It is on the 1040 line 56.  The SE tax is in addition to your regular income tax on the net profit.

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5 Replies
VolvoGirl
Level 15

Question About 1099-MISC, Medicare and social security tax.

Hopefully your income shows up on the 1040 line 12 and not line 21 for other income.  You should have a schedule C for self employment income.  If you have a net profit of $400 or more you will pay 15.35% SE tax. 

Self Employment tax (Scheduled SE) is automatically generated if a person has $400 or more of net profit from self-employment.  You pay 15.3% for 2013 SE tax on 92.35% of your Net Profit greater than $400.  The 15.3% self employed SE Tax is to pay both the employer part and employee part of Social Security and Medicare.  So you get social security credit for it when you retire.  You do get to take off the 50% ER portion of the SE tax as an adjustment on line 27 of the 1040.  The SE tax is already included in your tax due or reduced your refund.  It is on the 1040 line 56.  The SE tax is in addition to your regular income tax on the net profit.

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WalterM
New Member

Question About 1099-MISC, Medicare and social security tax.

When you get a Form 1099-MISC with income in Box 7, you are being treated as a self-employed independent contractor instead of a “W-2” employee.  Your social security and medicare are added (in the form of "self-employment tax") to the total amount due to the IRS that is calculated by TurboTax.

When you enter this information into the TurboTax section Wages & Income---Other Common Income---Income from Form 1099-MISC,  it will be treated as self-employment income and any such income over $400 will generate “self-employment tax” in addition to income tax.  This is how a person pays Social Security and Medicare on self-employment income.  For more on self-employment tax, see this link:

http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Self-Employment-Tax-Social-Security-a...

In case you are interested, here is information from the IRS on the “independent contractor versus employee” question:

http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Independent-Contractor-Self-Employed-...

paulx
Level 1

Question About 1099-MISC, Medicare and social security tax.

Nobody answers the question directly: "did turbo tax automatically take the social security taxes, medicare taxes? or do i need to send it out separately?"

dmertz
Level 15

Question About 1099-MISC, Medicare and social security tax.

With self-employment income properly entered into TurboTax, the total tax liability shown on your tax return, which goes to determining your tax refund or balance due, includes the self-employment tax (for Social Security and Medicare) calculated on Schedule SE.  If your tax withholding and estimated tax payments throughout the year were insufficient to cover your income tax and self-employment taxes, you'll owe a balance due with your tax return and you might have an tax underpayment penalty calculated on Form 2210.  You do not file Schedule SE separately from your individual tax return.

fanfare
Level 15

Question About 1099-MISC, Medicare and social security tax.

", did turbo tax automatically take the social security taxes, medicare taxes? or do i need to send it out separately"

 

It's hard]to answer directly because the question doesn't make sense.

TurboTax doesn't "take" taxes.

what does it mean "need to send out" ?

taxes you "need to send out" are not handled by Turbotax.

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