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Because the actual formula is....
You pay 15.3% SE tax on 92.35% of your Net Profit. You have to first multiply the profit by 92.35%. I think it's so you don't pay tax on the tax.
Look at your Schedule SE line 4a. Here is a blank one Schedule SE
Look at Schedule SE to see how it was calculated. 7.65% of net income does not get included.
@DawnC Is that for the employee or employer part? Probably the EE part since you are getting the separate deduction for the ER portion.
You are paying 15.3% for……
SS for employer 6.2% (up to 160,200 wages & profit)
SS for employee 6.2% (up to 160,200 wages & profit)
Medicare for employer 1.45% (on all wages & profit, no max)
Medicare for employee 1.45% (on all wages & profit, no max)
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