Oneill474
May 16, 2008, 09:21 AM
Did I do the formula correcty. Total income was $1,705 for the year
Figure out your net income from self-employment. Net income is typically your total business receipts minus your total business deductions.
Step2
Multiply your net income from self-employment by 0.9235 (or 92.35 percent). Your answer is called your "net earnings" from self-employment. If this number is less than $400, you don't have to pay self-employment tax.
Step3
Multiply the amount of your net earnings that is $76,200 or less by 0.153 (or 15.3 percent), and multiply any net earnings over $76,200 by 0.029 (or 2.9 percent). Add your two answers together. This is your self-employment tax.
Step4
Report your self-employment tax on Schedule SE of the 1040.
The profit from schedule c was only: $1,705.00
I figure the self-employment tax is $260.00
Is my math correct? I wonder how much goes to social security and the other for taxes.
Sole Proprietorship: Direct sales
Figure out your net income from self-employment. Net income is typically your total business receipts minus your total business deductions.
Step2
Multiply your net income from self-employment by 0.9235 (or 92.35 percent). Your answer is called your "net earnings" from self-employment. If this number is less than $400, you don't have to pay self-employment tax.
Step3
Multiply the amount of your net earnings that is $76,200 or less by 0.153 (or 15.3 percent), and multiply any net earnings over $76,200 by 0.029 (or 2.9 percent). Add your two answers together. This is your self-employment tax.
Step4
Report your self-employment tax on Schedule SE of the 1040.
The profit from schedule c was only: $1,705.00
I figure the self-employment tax is $260.00
Is my math correct? I wonder how much goes to social security and the other for taxes.
Sole Proprietorship: Direct sales