Solved: I made less than 7,000. Turbo says I have a 12,000 deduction and qualified for 1000 in credits but to only expect 835 after tax. How is my income still taxable?
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I made less than 7,000. Turbo says I have a 12,000 deduction and qualified for 1000 in credits but to only expect 835 after tax. How is my income still taxable?

 
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I made less than 7,000. Turbo says I have a 12,000 deduction and qualified for 1000 in credits but to only expect 835 after tax. How is my income still taxable?

I see that you are using the TTO Self Employed version, so I suspect that you have at least some income that is subject to self-employment taxes.  

When you have self-employment income from things like a Schedule C business or a Form 1099-MISC (independent contractor or general business income), you need to pay self employment taxes on that income in addition to regular taxes.  The tax rate for self employment taxes is roughly 15% (see link below for full description of these taxes) and that does NOT include the regular income taxes on your taxable income.

Your standard deduction and nonrefundable tax credits may be reducing your regular taxable income - but they don't reduce self-employment taxes on self-employment income.

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Level 7

I made less than 7,000. Turbo says I have a 12,000 deduction and qualified for 1000 in credits but to only expect 835 after tax. How is my income still taxable?

I see that you are using the TTO Self Employed version, so I suspect that you have at least some income that is subject to self-employment taxes.  

When you have self-employment income from things like a Schedule C business or a Form 1099-MISC (independent contractor or general business income), you need to pay self employment taxes on that income in addition to regular taxes.  The tax rate for self employment taxes is roughly 15% (see link below for full description of these taxes) and that does NOT include the regular income taxes on your taxable income.

Your standard deduction and nonrefundable tax credits may be reducing your regular taxable income - but they don't reduce self-employment taxes on self-employment income.

View solution in original post

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