Self employed pay social security tax

[towlesn25]

Does the software include helping me pay my social security and medicare taxes as well and do they take it out of your refund?

[xmasbaby0 · Accepted solution]

Yes when you enter your self-employment income, TT will calculate the amount you owe for SS and Medicare.

[towlesn25]

Does it come out of your refund?

[xmasbaby0]

Yes, your refund will be what is "left over" after self-employment taxes and ordinary income tax that you owe.

[nanjeff]

so my social security account will be credited?

[xmasbaby0]

Yes, when you pay self-employment tax you are paying into Social Security and into Medicare.  When you are a W-2 employee you pay half and your employer pays half.  When you are self-employed you are paying all of the SS and Medicare.

[nanjeff]

So, to confirm,, whether we are getting a refund or paying what we owe, my wife is credited for her social security and they the social security will credit it to her work history? TT will take care of that, or do we have to send a check to the Social security administration? Thanks for your help........

[xmasbaby0]

It is taken care of when the IRS processes your tax return.

[nanjeff]

You are a beautiful person..... thank you ..... one last question, I have a duplex and have been only deducting the mortgage interest on the rented side. I have heard that you are able to deduct the interest on the side you live in. is that correct?

[rob_m987]

Of the full 12.4% that self-employed are expected to pay, there is supposed to be a write-off for half. Does the software automatically calculate a write off for 6.2%? 

[VolvoGirl]

Yes.  You get to take off the 50% ER portion of the SE tax as an adjustment on 1040 Schedule 1 line 15 which flows to 1040 line 10.