Self-employment tax question

[shoyt01]

I made $3230.40 on a 1099-NEC as an independent contractor working as an emergency physician and paid $915 in estimated taxes.  I entered this into TurboTax Deluxe and under the "Self-Employment Tax" section, it calculates my self-employment taxes as only $87.  It doesn't allow me to adjust it.  This seems low because I thought self-employment tax rate is around 15.3% so it should be closer to $490.  Thanks in advance for your help!

-Steve

[VolvoGirl · Accepted solution]

Do you have a lot of W2 income?  There is a max.

The SE tax includes what you already paid in from your W2s so your schedule SE tax will only be the difference up to the max amount of $9,114.00 for social security. The max income for social security for 2022 is $147,000 between W2 wages and the schedule C Net Profit.

For 2022 the max for Social Security is $9,114.00 on $147,000 of wages (147,000 x 6.2%).

Medicare is 2.9% (both er & ee parts) of all wages & 92.35% Schedule C Net Profit - no max.

[VolvoGirl]

Yep.  You pay SE tax on 92.35% of your Net Profit

3230.40 x .9235 = 2983.27

then 2983.27 x .029 (Medicare) = 86.51 SE tax.

[shoyt01]

Thank you very much for your reply.  Yes I have $147,000 in Social Security Wages from my W2 with $9114 withheld for Social Security Tax.  That is why it looks like TurboTax is not taking out more for the Social Security Tax portion of my Self-Employment Income from my 1099-NEC income?

Thanks again!

-Steve

[VolvoGirl]

Yes.  You maxed out on the social security part.  The $87 is for Medicare.  

[shoyt01]

Great thanks so much for your help!

[Swegnson]

The really sad thing here is that Turbo Tax does not show the calculations in a way that would make it clear. The 92.35% factor can't be seen that I have found, nor can the 15.3% tax rate.

[DoninGA]

@Swegnson Those amounts and calculations are all on Schedule SE which is part of your tax return if you have net income from Self-Employment.

IRS Schedule SE - https://www.irs.gov/pub/irs-pdf/f1040sse.pdf

[Swegnson]

@DoninGA  Well yes and no. In Form 1040 when I go to line 23 and click on "goto supporting form" it takes me to Schedule 2. There if I again click on "goto supporting form" it takes me to the Form 1040 Worksheet. Once again I click on "goto supporting form" it takes me to the Schedule SE Adjustments Worksheet where the tax figure does not even appear. So now I am at a dead end. None of the "goto supporting form" links actually takes me to Schedule SE.

I grant you that if I do find my way to Schedule SE - where TT should have taken me on the first click - I do see the calculations, but by this time I am so angry at TT misdirection that I quit and take a break. It doesn't need to be this hard.