How to pay social security tax

[pandasingle]

I became self employed; how to pay SS tax? Is it included somewhere in my Federal or State taxes?

[BobB7 · Accepted solution]

When you enter your self employment income, Turbotax will calculate a SelfEmployment tax in addition to income taxes.  Selfemployment tax includes Social Security and Medicare.

[ChristinaS]

Social Security and Medicare tax are a part of the Self-Employment tax (SE tax). The SE tax is automatically added to your federal tax return based on the net income from self-employment. You add your income, you deduct your expenses... ..SE tax is automatically applied to the net result. This is how a self-employed person pays into Social Security.

If you have a net profit over $400, you can see the SE tax on line 57:

• My Account
• Tools
• View Tax Summary
• Preview 1040

[tgad1000]

Hi,

I received a 1099 form. what should I do to pay social security tax on this income? Does Turbo tax calculate that for me or I have to enter the amount manually? Please elaborate.

Best...

Tarek

[VolvoGirl]

Is it a 1099NEC or 1099Misc?  That is for self employment.   To report your self employment income you will fill out schedule C in your personal 1040 tax return and pay SE self employment Tax. You can fill out Schedule C and enter Self Employment Income into Online Deluxe but if you have any expenses you will have to upgrade to Premium version. Or buy any of the Desktop programs. All the Desktop programs have all the same forms, but you will get the most help in the Home & Business version.

How to enter income from Self Employment
https://ttlc.intuit.com/community/self-employed/help/how-do-i-report-income-from-self-employment/00/...

Turbo Tax automatically figures out the self employment tax for  you.   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% SE tax on 92.35% of your Net Profit (If it is 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 (FICA). So you get social security credit for it when you retire.

The SE tax is already included in your tax due or reduced your refund. It is on the 1040 Schedule 2 line 4 which goes to 1040 line 23. The SE tax is in addition to your regular income tax on the net profit.

[tgad1000]

Thank you for your quick response!

I do have the Turbo Tax Home and business. Should I get the delux?

which one is higher or bettter to report self employment income, and social security tax.

Best...

Tarek

[VolvoGirl]

The Desktop Home &  Business version is the highest version.  Deluxe is the lowest.  H&B is the one you want, it has the most help.   

In the Window's Home & Business Desktop program when you start a new return you get 2 choices. To prepare an Individual Tax Return or to prepare W2s or 1099s to give to your employees and sub contractors.

Click the big blue button to Start a New Return or go up to the top black menu bar first item, File-New Tax Return.
Then on the next screen it asks What would you like to do?

If you get a screen with 2 choices, Check the first circle that says Start a New Individual Tax Return.

By the way,  You need to report all your income whether or not you get a 1099 for it. Actually you can enter your total income as Cash or General income instead of entering the actual 1099. Only the total goes to Schedule C.

You need to report all your income even if you don't get a 1099NEC, 1099K or 1099Misc. You use your own records. You are considered self employed and have to fill out a schedule C for business income. You use your own name, address and ssn or business name and EIN if you have one. You should say you use the Cash Accounting Method and all income is At Risk.

After it asks if you received any 1099NEC it will ask if you had any income not reported on a 1099NEC. You should be keeping your own records. Just go through the interview and answer the questions. Then you will enter your expenses.

Turbo Tax Beginners Tax Guide for the Self Employed
https://turbotax.intuit.com/tax-tips/self-employment-taxes/beginners-tax-guide-for-the-self-employed...

Here is some IRS reading material……
IRS information on Self Employment
https://www.irs.gov/businesses/small-businesses-self-employed/self-employed-individuals-tax-center

Publication 535 Business Expenses
https://www.irs.gov/pub/irs-pdf/p535.pdf

Publication 334, Tax Guide for Small Business
https://www.irs.gov/pub/irs-pdf/p334.pdf