help!!!!!
Why do we pay taxes on your net total on you business, then turn around and pay SE taxes on the same amount??????
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SE taxes for a self-employed person are the same as Social Security and Medicare taxes on employees (also called FUTA).
An employee pays 7.65% of his/her wages for Social Security and Medicare taxes, while the employer pays the other 7.65%. A self-employed person has to pay the entire 15.3% on the net business income.
However, just as the employer pays half of the FUTA, the self-employed person is granted the ability to take an adjustment to income for one-half of the SE tax (this appears on line 14 of Schedule 1 (1040)), reducing taxable income. This is done automatically by TurboTax.
The other tax is federal income tax, which is a separate tax from the Social Security and Medicare taxes, and all are due.
[Edited 3/17/2020 2:40 pm CDT - updated Sch SE reference for 2019]
SE taxes for a self-employed person are the same as Social Security and Medicare taxes on employees (also called FUTA).
An employee pays 7.65% of his/her wages for Social Security and Medicare taxes, while the employer pays the other 7.65%. A self-employed person has to pay the entire 15.3% on the net business income.
However, just as the employer pays half of the FUTA, the self-employed person is granted the ability to take an adjustment to income for one-half of the SE tax (this appears on line 14 of Schedule 1 (1040)), reducing taxable income. This is done automatically by TurboTax.
The other tax is federal income tax, which is a separate tax from the Social Security and Medicare taxes, and all are due.
[Edited 3/17/2020 2:40 pm CDT - updated Sch SE reference for 2019]
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