topic Re: SS Taxes in Self employed

SS Taxes

High-Plains — Sun, 15 Mar 2020 22:55:15 GMT

I operate two small businesses in addition to my regular job. How am I paying into Social Security from income from these two businesses.

Where does Turbo Tax do this?

Thanks for your help.

Re: SS Taxes

VolvoGirl — Sun, 15 Mar 2020 22:57:00 GMT

That is the SE Tax. 2019 max SS tax is $8,239.80 on $132,900 of wages.

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.

For 2019 Schedule C Net Profit or Loss now goes to 1040 Schedule 1 line 3. Then the total on schedule 1 line 9 goes to 1040 line 7a.

If you also have W2 income, you have to break out the Social Security and Medicare taxes. Only the Social Security part maxes out. Turbo Tax does it automatically for you.

Re: SS Taxes

High-Plains — Sun, 15 Mar 2020 23:08:27 GMT

Hmm, ok Rolls-RoyceGirl (Volvo) this has me thinking (dangerous). These small businesses are in my wife's name only. Are these SS dollars applied to only my wife SS account? We file jointly.

Thank you for your help

Re: SS Taxes

VolvoGirl — Sun, 15 Mar 2020 23:13:17 GMT

Yes. Each person has their own SS account. The max SS is per person. You need to enter each W2, 1099 and assign schedule C to the right person.

Re: SS Taxes

High-Plains — Sun, 15 Mar 2020 23:23:38 GMT

VVGirl, sorry for being so dense. Does Turbo Tax enter the SS money in proper SS account (wife's vs my SS account) My wife is listed as the sole owner for both businesses.

Thank you for your help