I made $10,000 as a contracted employee in 1099MISC forms. After business deductions, my AGA is $5884 so I owe $895. My EIC of $449 was deducted, now I owe $446 in taxes! My standard deduction is 6300 and my personal exemptions are 4050. That totals $10050 and I only made 10000! I don't understand how I can possibly owe on such minimal income. Help!
You'll need to sign in or create an account to connect with an expert.
The amount you owe is not "income tax"; it is self-employment tax. (SE)
As self-employed, you have to pay both sides of SS & Medicare taxes. The rate is approximately 15% (give or take a little bit).
Your net income (AGA) for self-employment is $5,884 * 15.2%=$895.
If you would have received a W-2 for $5,884, approximately $447 would have been withheld from your wages for SS & Medicare. The employer would have paid the other half.
You actually paid $0.00 in income tax. The Earned Income Credit actually paid some of the SE tax.
The amount you owe is not "income tax"; it is self-employment tax. (SE)
As self-employed, you have to pay both sides of SS & Medicare taxes. The rate is approximately 15% (give or take a little bit).
Your net income (AGA) for self-employment is $5,884 * 15.2%=$895.
If you would have received a W-2 for $5,884, approximately $447 would have been withheld from your wages for SS & Medicare. The employer would have paid the other half.
You actually paid $0.00 in income tax. The Earned Income Credit actually paid some of the SE tax.
Still have questions?
Make a postAsk questions and learn more about your taxes and finances.
Wendylynn21
New Member
eastside
Level 1
idahonative5
New Member
McKenna3435
Level 2
fahezan
New Member
Did the information on this page answer your question?
You have clicked a link to a site outside of the TurboTax Community. By clicking "Continue", you will leave the Community and be taken to that site instead.