View Full Version : Self-employment taxes - do I subtract $400?
todohere
Dec 27, 2012, 10:02 PM
If I earned $4000, do I subtract $400 from it considering first $400 is tax-free? I haven't seen it mentioned everywhere, but a couple places did mention it.
AtlantaTaxExpert
Dec 27, 2012, 10:09 PM
This subtraction is done on Schedule SE where you calculate the self-employment tax.
todohere
Dec 27, 2012, 10:30 PM
I didn't find any spot on Schedule SE to subtract this $400.
AtlantaTaxExpert
Dec 28, 2012, 06:07 AM
Look on Line #4 of the Schedule SE
todohere
Dec 28, 2012, 04:39 PM
It only talks about whether it is less than or greater than $400. It doesn't mention whether I am supposed to subtract $400. For example, if I earned $4000, do I pay tax on .9252*4000? Or on .9252*4000-400?
AtlantaTaxExpert
Dec 28, 2012, 05:20 PM
The FIRST calculation.