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Adding a 2,000 1099-MISC payment made my owed taxes raise by ~$800 which seems very high. Does anyone who understands self-employment taxes know why this might be?
My understanding is that it should be taxed at 12.4% for social security and 2.9% for Medicare which would only be about ~$300.00.
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Adding a 2,000 1099-MISC payment made my owed taxes raise by ~$800 which seems very high. Does anyone who understands self-employment taxes know why this might be?
You also will be paying your normal federal and state rate along with the self-employed tax rate. For example:
Federal rate 25%
State rate 6%
Self-employed rate 15%
On $2,000 you can be paying
Federal $500
State $120
Self-Employed $300
Total taxes on $2,000 is $920
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Adding a 2,000 1099-MISC payment made my owed taxes raise by ~$800 which seems very high. Does anyone who understands self-employment taxes know why this might be?
You also will be paying your normal federal and state rate along with the self-employed tax rate. For example:
Federal rate 25%
State rate 6%
Self-employed rate 15%
On $2,000 you can be paying
Federal $500
State $120
Self-Employed $300
Total taxes on $2,000 is $920
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
**Mark the post that answers your question by clicking on "Mark as Best Answer"
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