She earned less than $4,000 as an independent contractor and assumed that she would owe nothing since it is less than $12,000. Turbotax calculated that she owes $515.
Unfortunately, with self-employment, comes self-employment taxes. She will have to pay her share of Social Security and Medicare taxes.
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She owes self-employment tax for Social Security and Medicare. If a person has even $400 of self-employment income they are required to file a tax return and pay 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.
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