Self Employment tax
(Scheduled SE) is generated if a person has $400 or more of net profit from
self-employment on Schedule C. You pay 15.3% for 2014 SE tax on 92.35% of
your Net Profit 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. You do
get to take off the 50% ER portion of the SE tax as an adjustment on line 27 of
the 1040. The SE tax is already included in your tax due or reduced your
refund. It is on the 1040 line 57. The SE tax is in addition to
your regular income tax on the net profit.
PAYING ESTIMATES
For SE self employment tax - if you have a net profit (after expenses) of $400
or more you will pay 15.3% for 2015 SE Tax on 92.35% of your net profit
in addition to your regular income tax on it. So if you have other income like
W2 income your extra business income might put you into a higher tax bracket.
You must make quarterly estimated tax payments for the current tax year (or
next year) if both of the following apply:
- 1. You expect to owe at least $1,000 in tax for the current tax year, after
subtracting your withholding and credits.
- 2. You expect your withholding and credits to be less than the smaller of:
90% of the tax to be shown on your current year’s tax return, or
100% of the tax shown on your prior year’s tax return. (Your prior year tax
return must cover all 12 months.)
To prepare estimates for
next year, You can just type W4 in the search box at the top of your return ,
click on Find. Then Click on Jump To and it will take you to the estimated tax
payments section. Say no to changing your W-4 and the next screen will start
the estimated taxes section.
OR Go to….
Federal Taxes or Personal (H&B version)
Other Tax Situations
Other Tax Forms
Form W-4 and Estimated Taxes - Click the Start or Update button
