First time using TurboTax. Filed married filing separate. My income was $1,200. Self-employed. Had to pay $770 in taxes. I do not understand this

[teryanne88]

Why am I paying taxes on a income of $1,200

[SweetieJean]

Are you in a Community Property State?

[teryanne88]

Yes

[SweetieJean]

Did you claim half of your spouse's income, deductions, etc on your return?

[VolvoGirl · Accepted solution]

Self Employment tax (Scheduled SE) is automatically generated if a person has $400 or more of net profit from self-employment.  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.  You do get to take off the 50% ER portion of the SE tax as an adjustment on 1040 Schedule 1 line 27.   The SE tax is already included in your tax due or reduced your refund.  It is on the 1040 Schedule 4 line 57 which goes to 1040 line 14.  The SE tax is in addition to your regular income tax on the net profit.

$1,200 x .9235 = $1,108
$1,108 x .153 = $170 Self employment tax

[VolvoGirl]

You owe self employment tax on it even if you don't owe any regular income tax on it.

[SweetieJean]

"Had to pay $770 in taxes."  Any penalties, such as for not having health insurance?

[VolvoGirl]

Oh I thought it said 170

[SweetieJean]

$770 might be a typo.

[teryanne88]

Have health insurance. Not a typo

[SweetieJean]

MFS in a Comm Prop State requires that you both split everything 50/50.