2 W2's 1099-NEC and 1099 MISC taxation

[irgz]

Hi all,

Usually taxes are simple for me with TurboTax. I use TurboTax for years. Fill up forms and if amount more or less ok - I just pay and move on. This year tax preparation became a bit difficult to me because the number I have to pay is a bit too much and I decided to dig. 

Using TurboTax Home and Business. 

Here is a simple data:

2 W2's are bringing $165k

1099-NEC $15400

1099-MISC $2727

3 kids

Aftercare $4000.00

Mortgage 

TurboTax saying Standard Deduction. No state tax.

Overall, after adding W2's, minor kids and their aftercare, car registration and mortgage I am getting +$689.

Once I add MISC and NEC ( before QBI and some small expenses, I am getting -$5600.

From 18k it is almost 34%.

Here is a caveat, I didn't paid estimated taxes, my bad, the TurboTax is saying the estimated taxes for my NEC and MISC are about $2400 - which I am obviously agree to pay. But what is with another numbers?

If someone could explain how is this approximate 34% being calculated - that would be great!

Thank you so much!

p.s. never posted here before, if it needs to be moved to some other section of this forum - please move it. 

[hbl3973]

irgz,

Most likely didn't need the full Home and Business, but to switch you would have to clear and start over.  We do returns like this in the AARP Tax-Aide without charge.  (No need to join AARP and you only have to be 18 or older.)

Anyhow, a couple of questions.  What is your filing status?  Married filing jointly?  Head of Household?  And is the MISC payment for a self-employed contract job?  (The NEC form is definitely one.)

[irgz]

Filing jointly. 1099-MISC issued for YouTube monetization by Google. 

[hbl3973]

 One quick observation is that you are on the hook for 15.3% Self-Employment Tax on the NEC and MISC income.  If you aren't able to claim expenses for them, this adds about $2,700 to the tax bill.

[irgz]

Am I understanding it right that I have to pay 15.3% + whatever it adds up on income tax?

[hbl3973]

Form 1040 would report

$165K wages,

$18.127K self-empl. income

-$1.281K self-empl. tax deduction

$181.846K AGI

-$25.9K std ded.

-$3.369 QBI

$152.577K taxable income

$24.801K regular tax (16.25%)

-6.8K child credits

+2.561K self-empl tax

20.562K tax

As you are in the 24% tax bracket, I don't know where you got the $18K number, but your tax is indeed about 35% higher than $18K.

[hbl3973]

Correct.  Self employment tax is added to the regular tax to capture the Social Security and Medicare taxes on wages.