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I made $10k as a contracted employee per 1099MISC forms. My standard deduction is 6300 and my personal exemptions are 4050. That totals $10050 and I only made 10k!
I made $10,000 as a contracted employee in 1099MISC forms. After business deductions, my AGA is $5884 so I owe $895. My EIC of $449 was deducted, now I owe $446 in taxes! My standard deduction is 6300 and my personal exemptions are 4050. That totals $10050 and I only made 10000! I don't understand how I can possibly owe on such minimal income. Help!
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I made $10k as a contracted employee per 1099MISC forms. My standard deduction is 6300 and my personal exemptions are 4050. That totals $10050 and I only made 10k!
The amount you owe is not "income tax"; it is self-employment tax. (SE)
As self-employed, you have to pay both sides of SS & Medicare taxes. The rate is approximately 15% (give or take a little bit).
Your net income (AGA) for self-employment is $5,884 * 15.2%=$895.
If you would have received a W-2 for $5,884, approximately $447 would have been withheld from your wages for SS & Medicare. The employer would have paid the other half.
You actually paid $0.00 in income tax. The Earned Income Credit actually paid some of the SE tax.
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I made $10k as a contracted employee per 1099MISC forms. My standard deduction is 6300 and my personal exemptions are 4050. That totals $10050 and I only made 10k!
The amount you owe is not "income tax"; it is self-employment tax. (SE)
As self-employed, you have to pay both sides of SS & Medicare taxes. The rate is approximately 15% (give or take a little bit).
Your net income (AGA) for self-employment is $5,884 * 15.2%=$895.
If you would have received a W-2 for $5,884, approximately $447 would have been withheld from your wages for SS & Medicare. The employer would have paid the other half.
You actually paid $0.00 in income tax. The Earned Income Credit actually paid some of the SE tax.
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I made $10k as a contracted employee per 1099MISC forms. My standard deduction is 6300 and my personal exemptions are 4050. That totals $10050 and I only made 10k!
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I made $10k as a contracted employee per 1099MISC forms. My standard deduction is 6300 and my personal exemptions are 4050. That totals $10050 and I only made 10k!
What you might have received back when you received a W-2 and filed your income tax return would be any federal INCOME TAX that might have been withheld from your paycheck....along with any EIC.
Yes, for self-employed people, it is a double edged sword. They end up paying the employee's share of SS & Medicare...and since they are also the employer, they end up paying the employer's share as well.
Then, just as in the case of a W-2, there is income tax to be paid as well. Basically being self-employed adds about 7 1/2% tax to the individual....the employer's share of SS & Medicare.
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