Without seeing your return, I cannot tell you why. You may consider using TurboTax Live to file your 2020 taxes. To change to TurboTax Live, click Upgrade. In TurboTax Live, once you complete your taxes, before you file, you’ll be given the option for a final review of your return by one of our tax professionals. After they completed reviewing your return, they’ll inform you of any proposed changes. Here are the details:
In the future, in order not to owe, I will suggest you to make adjustments on your Form W-4. Unlike your Form W-2 which includes both federal and FICA tax withholdings, you can only take out federal taxes in box 4 on your Form 1099-NEC. Normally, on your W-2, the current Social Security and Medicare tax rates are 6.2% and 1.45%, respectively. So between employer and employee, each party pays 7.65% of their income, for a total FICA contribution of 15.3%.
You will have to use the links below to figure out how much you should withhold so you will not owe. The W-4 Form is an IRS form that you complete to let your employer know how much money to withhold from your paycheck for federal taxes. Accurately completing your W-4 can help you prevent having a big balance due or not enough refund ( in your situation) at tax time. It can also help you avoid overpaying on your taxes so you can put more money in your pocket during the year.
In TurboTax online,
- Sign in to your account and select Pick up where you left off
- From the upper right menu, select Search and type in w4 and Enter
- Select the Jump to w4
- Follow prompts
For more information, click here:
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A 1099NEC is for self employment income. It is taxable and you pay self employment tax on it.
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 (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 is already included in your tax due or reduced 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.