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ja9cob
New Member

II am self employed and made approx. $11,000. After the deductions my taxable income is $707. According to the program it says I owe $1776. How is this?

 
2 Replies
VolvoGirl
Level 15

II am self employed and made approx. $11,000. After the deductions my taxable income is $707. According to the program it says I owe $1776. How is this?

You also owe Self Employment tax on the Net Profit on Schedule C even if you don't owe any regular income tax on it.  Did you have any business expenses to write off against the 11,000?  If you have 11,000 net profit on schedule C you will owe around $1,550 SE tax on it.    

You probably also owe a penalty on 1040 line 79 for owing over 1,000.  So check for that too. You might be able to eliminate it or at least reduce it.  You can go to Federal Taxes tab or Personal tab, under Other Tax Situations and select Start by the Underpayment Penalties. You will answer a series of questions that may reduce or eliminate the penalty. Or you can elect to have the IRS figure the penalty for you.  It's form 2210.

It's under
Federal Taxes or Personal (for H&B version)
Other Tax Situations
Additional Tax Payments
Underpayment Penalties - Click the Start or update button
steveescher1010
New Member

II am self employed and made approx. $11,000. After the deductions my taxable income is $707. According to the program it says I owe $1776. How is this?

also you can file jointly with your company which will give you a K-1 to file personally....in your case it will show whatever you payed yourself after company deductibles. so if you payed yourself 707 you would pay taxes on the. which is about 20% or 140 bucks 

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