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Level 1
posted Jun 3, 2019 1:45:08 PM

I earned $11K in 2018 and had $12K in standard deductions. Why do I then owe $1K in taxes?

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1 Best answer
Level 15
Jun 3, 2019 1:45:17 PM
7 Replies
Level 15
Jun 3, 2019 1:45:09 PM

Was any of your income from self-employment?  If so, you owe self-employment tax for Social Security and Medicare.

Level 1
Jun 3, 2019 1:45:10 PM

Yes.  $8K of the $11K was self-employment.

Level 15
Jun 3, 2019 1:45:12 PM

That is why you  owe.

Level 1
Jun 3, 2019 1:45:13 PM

Yep, I see that now as social security tax.  Thanks, you helped me!

Level 1
Jun 3, 2019 1:45:14 PM

Too bad TurboTax doesn't show this "tax" as SS tax in their software tabs/figures.  Sure looks like an error, until you look at the actual Federal forms.  

Level 15
Jun 3, 2019 1:45:15 PM

Isn't it listed as self employment tax?
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.

Level 15
Jun 3, 2019 1:45:17 PM