I was guided to have a schedule 1, 2 , C, SE and forms 4797 & 8995. I am very confused. She has expenses and replaced a car due to an accident. What Am I missing
If she has a net income from the self-employment then you will owe Self-Employment taxes which are separate from federal income taxes.
Self-employment tax (SE tax), is the Social Security and Medicare tax paid by self-employed individuals. It is similar to the Federal Insurance Contributions Act (FICA), which is the Social Security and Medicare taxes withheld from an employee’s paycheck.
When you’re self-employed, you are paid the full amount you earn. Nothing is deducted from your check for Social Security and Medicare taxes. Instead, you make estimated tax payments during the year to pay your SE tax and your income tax. If you don’t make estimated tax payments, then you pay these taxes when you file your return.
If you’re self-employed, you can claim a federal deduction for half the SE tax you pay, which can help lower your taxes.
The SE tax rate is 15.3% with 12.4%for Social Security and 2.9%for Medicare.
We report your SE tax on Schedule SE and also calculate the deduction that goes along with it.