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My total income (self employed) income was 24k, filing single, how is my total tax starting over 4k? this makes no sense if I should be in a much lower tax bracket.

 
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3 Replies
AnnetteB6
Employee Tax Expert

My total income (self employed) income was 24k, filing single, how is my total tax starting over 4k? this makes no sense if I should be in a much lower tax bracket.

If your income is due to self-employment, then you are subject to income tax plus self-employment tax.  

 

Your income and filing status determines the tax bracket for your income tax portion.  The self-employment tax is separate from the income tax and is 15.3% of net earnings from self-employment.  The majority of the tax you are seeing on your return is due to self-employment tax.  

 

To learn more, take a look at the following TurboTax article:  What is the self-employment tax?

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My total income (self employed) income was 24k, filing single, how is my total tax starting over 4k? this makes no sense if I should be in a much lower tax bracket.

So you're saying because I'm self employed I have to pay my regular tax bracket income at 10-12% plus an additional 15.3% of self employment income tax?

AnnetteB6
Employee Tax Expert

My total income (self employed) income was 24k, filing single, how is my total tax starting over 4k? this makes no sense if I should be in a much lower tax bracket.

Yes.  You pay income tax on your total income plus self-employment tax on your self-employment income.

 

The self-employment tax is paying into the Social Security and Medicare system for your future benefit.  If you had been paid wages on a W-2, Social Security and Medicare taxes would have been withheld from your wages and your employer would have also paid the same amount on your behalf for Social Security and Medicare tax.  Since you do not have an employer when you are self-employed, you are responsible for paying the full amount through the Self-Employment tax collected through your tax return.

 

@kennyfontan-keye

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