Self Employment Taxes

[Squatch1]

My wife made a profit on her small business of $13000 and turbo tax did all the computations as to whether we needed to pay estimated taxes. After all information was entered and the amount of Federal income tax already paid it said that the estimated payments were not required. My question is do we still need to pay the SS and Medicare taxes directly or are these taken out of the amount already withheld before we got our refund. Does the IRS pay the taxes to the appropriate organizations or do we still have to pay them. I am confused as to what to do.

[carolineb]

Hello Squatch1, 

Self employment income is subject to three federal taxes: income tax, Social Security tax and Medicare tax. Depending on which state you live in, self employment may be subject to state income tax as well. Since your wife's income was entered on your return, the TurboTax program calculated any income tax as well as self employment taxes (SS and Medicare) and reported those tax liabilities on your 1040 form. The refund that you received is what is left of your withholding AFTER all of these tax liabilities have been covered. There is no need for you to take any additional action. 

[Squatch1]

Thank you for the info.... I can now relax fer a bit........ I wish the tax laws and explanations were more user friendly and explicit. Again thank you....