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schabrow
New Member

My income is under $12,000 and I still owe tax. Shouldn't my effective tax rate be $0

 
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1 Reply
ChristinaS
Expert Alumni

My income is under $12,000 and I still owe tax. Shouldn't my effective tax rate be $0

Your effective tax rate probably is 0%. But...It says you are using Turbo Tax Self-Employed, so don't forget the Self-Employment Tax. SE Tax represents Social Security and Medicare, which you pay regardless of your effective income tax rate. Exemptions and deductions don't reduce this tax.

You can owe $0 in income taxes and still owe SE tax.

SE tax is net Schedule C business income:

a/ times .9235.

b/ multiple (a) times .152

https://www.irs.gov/pub/irs-pdf/f1040sse.pdf

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