topic Should I apply for EITC or other deductions? in Get your taxes done using TurboTax

Should I apply for EITC or other deductions?

tk01kj — Tue, 10 Mar 2026 07:12:22 GMT

I am single 26yo living in the state of VA, non head of household with no children or dependents. In 2021 I earned $115k W2 wages + $68k short term capital gain + $21k rental income - rental deductions. This year no W2 wages + $4.2k long term capital gains + $8k self employment income + $1k in dividends/interest + $21k rental income - rental deductions + car tax (?).

1) I still have to pay the 14% self employment tax on the $8000 which is not deducted by standard deduction. EITC is only half of the 14% self employment tax, up to $560 in my case, leaving me only $560 self employment tax owed. Why doesn't self employment income count towards the standard deduction like capital gains tax does? It seems contributing $6000 out of the $8000 to a traditional IRA also does not deduct self employment tax. Since I have no income this year, is there anything else to decrease my self employment tax to 0 in any way?

2) I bought a car in Jul 2022, but I didn't have to pay any property tax on the car this year, only sales tax amounting to around 4.5% of the sale price. My county also has not sent me a tax bill for the car this year, only the tax bill on my rental property.

3) VA tax department mentioned I might have incorrectly paid $550 in taxes to the state when I didn't need to. I worked entirely in WA in 2017 but for less than 120 days internship, for over 90 days I lived in VA but I was not working and 150 days I was out of the country. But 2017 VA still requires that I file a tax return and I ended up having to pay $550 taxes. But I never worked while living in VA even though my work period in 2017 was only 120 days and those 120 days I was in WA and VA I was only there for 90 days and the rest I was outside the country

Re: Should I apply for EITC or other deductions?

NCperson — Thu, 29 Dec 2022 21:45:16 GMT

@tk01kj - You don't "apply" for EITC, it is automatically calcuated by TT based on the IRS tables. It is simply a tax credit for your EARNED oncome. Look at the table on page 46 of the link below.

https://www.irs.gov/pub/irs-pdf/i1040gi.pdf

The self-employment tax is really paying for Medicare and Social Security tax that you would pay if you were a a W-2 employee.

Everyone has to pay the social security and medicare tax, but if you are W-2 it is withheld from your paycheck, if you are self-employed, it is collected via your tax return. it is NOT "INCOME"; it is a separate "Medicare and Social Security" tax and that is why you owe it regardless of your INCOME tax situation.

as far as the car tax, it depends on the state you live in as those taxes are state driven and not federally driven. Many states have both retail taxes and property taxes so it makes sense you could pay both. It could just be the way the state administers property tax resuling in a timing difference, so there was no property tax this year. Contact your local taxing authority to understand what happened to the property tax.

does that make sense and answer your questions>

Re: Should I apply for EITC or other deductions?

xmasbaby0 — Thu, 29 Dec 2022 21:45:40 GMT

https://ttlc.intuit.com/community/self-employed/help/what-is-the-self-employment-tax/00/25922

https://ttlc.intuit.com/questions/2902389-why-am-i-paying-self-employment-tax