topic Self Employment in Get your taxes done using TurboTax

Self Employment

stantheman226 — Mon, 20 Jul 2020 21:14:45 GMT

When you work SE do you automatically pay the 15% SE tax and the ordinary income tax rate thats based on your yearly earnings as a independent contractor?

Re: Self Employment

Bsch4477 — Mon, 20 Jul 2020 21:34:11 GMT

I don’t know what you mean by automatically but yes, you pay regular income tax on your earnings as well as about 15.3% self employment tax. You should be paying estimated tax quarterly if you will owe more than $1,000 tax when you file your return.

Re: Self Employment

VolvoGirl — Mon, 20 Jul 2020 21:36:13 GMT

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 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.

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 15. The SE tax is in addition to your regular income tax on the net profit. You do get to take off the 50% ER portion of the SE tax as an adjustment on 1040 Schedule 1 line 14 which flows to 1040 line 8a. Turbo Tax automatically calculates the SE Tax and Adjustment.