The estimated tax payments that I made for my first year consulting service included income tax, social security tax, and medicare tax. In the deductions section of Turbo Tax, no distinction is made. Should the entire amount be entered or only the income tax portion of the estimate? If only income tax, how do you settle up the social security and medicare? Thanks.
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Just enter the full amount you paid. It goes against your total tax due which includes your regular income tax and any self employment tax on a Schedule C Net Profit.
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). The 15.3% self employed SE Tax is to pay both the employer part and employee part of Social Security and Medicare. So you get social security credit for it when you retire.
The SE tax is already included in your tax due or reduced your refund. It is on the 1040 Schedule 2 line 4 which goes to 1040 line 23. The SE tax is in addition to your regular income tax on the net profit. You do get to take off the 50% ER portion of the SE tax as an adjustment on 1040 Schedule 1 line 14 which flows to 1040 line 10a. Turbo Tax automatically calculates the SE Tax and Adjustment.
Just enter the full amount you paid. It goes against your total tax due which includes your regular income tax and any self employment tax on a Schedule C Net Profit.
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). The 15.3% self employed SE Tax is to pay both the employer part and employee part of Social Security and Medicare. So you get social security credit for it when you retire.
The SE tax is already included in your tax due or reduced your refund. It is on the 1040 Schedule 2 line 4 which goes to 1040 line 23. The SE tax is in addition to your regular income tax on the net profit. You do get to take off the 50% ER portion of the SE tax as an adjustment on 1040 Schedule 1 line 14 which flows to 1040 line 10a. Turbo Tax automatically calculates the SE Tax and Adjustment.
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