I made $10,000 as a contracted employee in 1099MISC forms. After business deductions, my AGA is $5884 so I owe $895. My EIC of $449 was deducted, now I owe $446 in taxes! My standard deduction is 6300 and my personal exemptions are 4050. That totals $10050 and I only made 10000! I don't understand how I can possibly owe on such minimal income. Help!
You'll need to sign in or create an account to connect with an expert.
The amount you owe is not "income tax"; it is self-employment tax. (SE)
As self-employed, you have to pay both sides of SS & Medicare taxes. The rate is approximately 15% (give or take a little bit).
Your net income (AGA) for self-employment is $5,884 * 15.2%=$895.
If you would have received a W-2 for $5,884, approximately $447 would have been withheld from your wages for SS & Medicare. The employer would have paid the other half.
You actually paid $0.00 in income tax. The Earned Income Credit actually paid some of the SE tax.
The amount you owe is not "income tax"; it is self-employment tax. (SE)
As self-employed, you have to pay both sides of SS & Medicare taxes. The rate is approximately 15% (give or take a little bit).
Your net income (AGA) for self-employment is $5,884 * 15.2%=$895.
If you would have received a W-2 for $5,884, approximately $447 would have been withheld from your wages for SS & Medicare. The employer would have paid the other half.
You actually paid $0.00 in income tax. The Earned Income Credit actually paid some of the SE tax.
Still have questions?
Make a postAsk questions and learn more about your taxes and finances.
wagsyardsolution
New Member
laurie9916
New Member
s0u1ma7e
New Member
bedledaedkedeed
New Member
arodmcg
New Member
Did the information on this page answer your question?
You have clicked a link to a site outside of the TurboTax Community. By clicking "Continue", you will leave the Community and be taken to that site instead.