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Why am I paying self-employment tax?

Most often, it’s because you entered self-employment income, either as cash or from a 1099-MISC or 1099-K form. If your self-employment income is $400 or more, after deducting expenses, you'll have to pay self-employment tax.

 

If you have a 1099-MISC and Box 7 is filled

This is self-employment income and you would pay taxes on it, on the conditions described above.

 

Not all 1099-MISC forms are from self-employment

Examples of 1099-MISC that are not from self-employment include prize money, lawsuit settlement, research study, and others. You don’t need to pay self-employment tax on these types of income. We’ll figure this for you when you enter your 1099-MISC.

If your 1099-MISC incorrectly has income in Box 7, you should contact the payer and have them issue a corrected 1099-MISC.

 

Other less common reasons to pay self-employment tax

  • You have clergy income.
  • Your income as a church employee exceeds $108.28.
  • You received income from a partnership (Schedule K-1).
  • The income on your 1099-MISC is incorrectly reported as self-employment income, Box 7. (Contact the payer to have them issue you a corrected 1099-MISC).

Self-employment tax and income tax are two separate taxes

You can owe self-employment tax even if you don't need to pay income tax.

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