On one screen, it said my self-employment tax was $994. A couple of page later, in the summing up of what I owe, the self-employment tax was doubled to $1,988. Why?

[yksinainen]

The discrepancy seems to be a software problem. I have checked & doublechecked my entries, but the site is consistently giving me two different numbers -- & that's a considerable difference in my tax liability.

[VolvoGirl · Accepted solution]

How much is the Net Profit on your Schedule C?  You might be seeing 1/2 of the SE tax that is used for other things.  

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 (If it is greater than $400). 

[yksinainen]

Thanks for your reply. I finally was able to talk with a human being at TurboTax, & he explained that the $994 referred to a half-off deduction for the full self-employment tax. So I still ow the full $1988, but half that amount was deducted elsewhere. Or something like that. (I'm obviously not a tax expert.) In the end, I attribute the confusion to lack of clarity in the wording TurboTax had in explaining along the way. But next time I'll know.

Thanks again.

[VolvoGirl]

Yes I was going to mention that.  You get to take off the 50% ER portion of the SE tax as an adjustment to your regular income on 1040.   It will be on Schedule 1 line 15 which goes to 1040 line 10.  

You are paying 15.3% SE Tax for…..
SS for employer 6.2%
SS for employee 6.2%
Medicare for employer 1.45%
Medicare for employee 1.45%

[yksinainen]

Hmmm. Given that my little business (an adjunct to retirement benefits) only has me -- employer & employee both -- does this mean I'm paying into SS & Medicare twice for myself? Or something....

[DawnC]

You are not paying twice, but you are paying for both the employer and employee portions of the Self-Employment tax.  The total tax is 15.3%.   The employer pays 7.65% and the employee pays 7.65%.   Since you are both employee and employer, you pay the full 15.3%, on net earnings.   But you can deduct the employer portion as a business expense - TurboTax does this automatically.