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Level 3

Categorizing taxes on my salary vs. self-employed income

I made a small amount of money renting my car out via Turo this year as a business, at a net profit of $589. I'm trying to figure out how much of my overall taxes being paid are attributed to the Turo business versus my salary/overall income. My total income for the year falls into the 24% tax bracket so my thought would be that as the $589 is incremental, I'd be paying 24% (incremental federal) + 15.3% * .9235 (effective FICA taxes for self employed) + 8.25% (incremental state) = 46.38%. This doesn't seem right though especially when I play around with the turbotax calculator. Can someone help me with this since I would like to know what my real net earnings after tax are on the business.

 

One more question regarding this income: I paid a general excise tax on the gross receipts for this activity to the state. Is this tax deductible and if so, where can I enter the deduction?

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Employee Tax Expert

Categorizing taxes on my salary vs. self-employed income

It's difficult to say for sure if your calculation is exactly correct without seeing your tax return, but that is close.  The main exception is that $400 of the net profit is not taxed at the 15.3% self-employment rate.  Look at your Schedule SE to see this calculation. 

 

You generally won't enter your excise taxes (sales taxes), but rather include your gross income of your sales without that tax added. If you did include it in your gross receipts, there is a category called Taxes and Licenses in the Business Expenses area where you can deduct it.