Blended tax rate 58.8%?

[lachicuba]

Hello,

I'm a 1099-NEC employee; It says I owe $5,246 which comes from the $8,484 of total tax in my return minus the $3,238 in credits. My total income was $48,840 and deductions were $34,869 which makes the taxable income $14,151. I'm filing "married jointly" which I believe puts me in the 12% bracket, but my blended rate is 58.8%. I'd just like to make sure I understand since so far I gather that it's a blend of different tax rates that may be charged from investments, but I don't seem to be taxed for anything else other than the 1099 income. Any help understanding on why I wouldn't just pay 12% on the taxable income is greatly appreciated!

[VolvoGirl]

When you have 1099NEC self employment income on Schedule C the Net Profit you pay regular income tax on it and self employment tax.  I can't follow your numbers.  Do you have any other income like W2 or interest or 1099R?  Does your spouse have income?

list the line numbers you don't understand.

You pay Self Employment tax (Scheduled SE) on a Net Profit of $400 or more on Schedule C in addition to regular income tax on it.   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 will be automatically included in your tax due or reduce 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 15 which flows to 1040 line 10.

[Mike9241]

actually, $14K of taxable income puts you in the 10% bracket.

but then there is about 15% of self-employment tax on your net self-employment income. see schedule SE.

do you have state income taxes that may be included in the blended rate. it's a meaningless figure. 

TurboTax does not use the blended rate to calculate your taxes.  The IRS and states specify the methods and rates to be used, depending on the types of income shown in your return.

To see the method used to calculate your taxes, go to the Federal 1040 and look at the Tax Smart Worksheet.