How is self-employed taxes calculated?

[RG_McQ20]

My business is still at a loss after three years. All profits from labor and markup on parts goes to overhead and child support. We have no life or fun and how much am I supposed to set aside so I don’t keep getting screwed over by taxes. What am I doing wrong?

[carmen_t]

Hello and thank you for your question.  Self employment tax is calculated on business net income (gross income less cost of goods sold less expenses)  As a side note Gross Income is total income.  Once Net Income is calculated then that amount is used to calculate self employment tax.  SE tax is 15.3% (medicare and social security) and computed on Schedule SE.  I have inserted a link below from the IRS that has more detail and instructions plus the forms to review.  In addition, I will add links to a Tax Estimator and 1040ES for estimated tax payments.  I hope this answered your question and have a wonderful day.

 IRS SE Tax 

Tax Estimator

IRS 1040ES