Author Topic: self employment taxes  (Read 1100 times)

MrsCtank

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self employment taxes
« on: October 24, 2016, 07:17:02 PM »
Hi guys!

Quick question, anyone here have experience dealing with self employment taxes? I'm doing paid by the day commission work at $400/day, but am paying all travel, licensing, conference fees, and liability insurance out of pocket. I'm not working enough right now, maybe 1 day a week but trying to find full employment or at least increase my utilization. DHs income puts us in the 25% tax bracket, how will mine affect things this year? Wont I be paying close to 35%? Ive made maybe 6-8k in not yet taxed income, no estimated taxes paid but DH has held out a little extra.

Thanks

Telecaster

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Re: self employment taxes
« Reply #1 on: October 24, 2016, 07:46:29 PM »
Hi guys!

Quick question, anyone here have experience dealing with self employment taxes? I'm doing paid by the day commission work at $400/day, but am paying all travel, licensing, conference fees, and liability insurance out of pocket. I'm not working enough right now, maybe 1 day a week but trying to find full employment or at least increase my utilization. DHs income puts us in the 25% tax bracket, how will mine affect things this year? Wont I be paying close to 35%? Ive made maybe 6-8k in not yet taxed income, no estimated taxes paid but DH has held out a little extra.

Thanks

If you are self-employed, you must pay both sides (employer and employee) side of payroll taxes, but half of that is deductible against income taxes.   You can calculate your self-employment tax on Schedule SE, and you'll have to file Schedule C to report your income and deduct your expenses. 

I don't understand how you came up with 35% tax on income of $6-8K in addition to what your husband makes if you are in the 25% right now (assumed married filing jointly).   You'd have to earn a couple hundred thousand to jump up that high. 

MDM

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Re: self employment taxes
« Reply #2 on: October 24, 2016, 09:59:03 PM »
DHs income puts us in the 25% tax bracket, how will mine affect things this year? Wont I be paying close to 35%?
About 37.36%. 

Chart below assumes wages of $120K as the only other income, no pre-tax deductions, MFJ w/ 2 exemptions.  See the case study spreadsheet if you want to use your own numbers.