effective tax rate looks wrong

[jerseymf]

Hoping someone can help!  This is the summary of my taxes.  My questions are 1) if my taxable income is only $17344 isn't my tax really high; and 2) why does my effective tax rate say negative 2.98%? Isn't the calculation tax/taxable income which would be $6273 (or $4878) divided by $17344?  Thank you!

2019 | Adjusted Gross Income $ 46,830.00
Federal | Taxable Income $ 17,344.00
Tax | Total Tax $ 6,273.00
Return | Total Payments/Credits $ 1,395.00
Summary | Payment Due $ 4,878.00
| Penalty/Interest $ 149.00
| Balance Due With Penalty/Interest $ 5,027.00
| Effective Tax Rate -2.98%

[RobertG]

Total Tax on line 16 of Form 1040 includes tax other than the income tax.

It includes taxes from Schedule 2, like self employment tax.

TurboTax divides your total tax from line 12b, by your total income, line 7b, to get the effective tax rate.

This figure is just informational, it does not appear on your tax return or affect the amount of tax that you pay. 

[jerseymf]

Thank you, Robert!  Do you think it's odd that I'm paying about $5K in taxes on $17K in taxable income?

[RobertG]

Yes, unless the $5k includes other taxes besides the income tax.

You can view your 1040 form before you file or pay:

1. Open or continue your return.
2. Select Tax Tools in the left menu (if you don't see this, select the menu icon in the upper-left corner).
3. Then Select Tools
4. With the Tools Center menu open, you can then:
   • Select View Tax Summary
   • Then select Preview my 1040

Then you can see what the total tax consists of.  be sure to look at Schedule 2 - Additional taxes

[jerseymf]

Thank you, again.  It was for Self Employment taxes.  I guess I still don't understand that if my "taxable income" is only $17K then paying $6K in self employment taxes seems high - it's calculating this tax on one of the higher numbers before deductions, etc.  

[DeanM15]

Self Employment tax is generally calculated on your total profit from your business on a Schedule C.

There are no exemptions or reductions beyond business expenses. As a rule of thumb, the SE Tax runs at about 15 percent of your profit, although 14.4 percent is more accurate.

If you are a certain type of religious worker, you are charged SE tax on your housing allowance as well as your income. The housing allowance is not taxed for income tax purposes.

You can see the calculations on Schedule SE of your tax return. 

[VolvoGirl]

Self Employment tax (Scheduled SE) is automatically generated if a person has $400 or more of net profit from self-employment on Schedule C.  You pay 15.3% 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.    The self employment tax is in addition to the regular income tax on your taxable income.