City-Girl asked:
How is self employment tax calculated?
We are an S Corp. so we will be paying all our taxes at the end of the year. Is the self employment tax calculated before other tax is taken off or afer [net or gross amont]
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7
Jun
City-Girl asked:
How is self employment tax calculated?
We are an S Corp. so we will be paying all our taxes at the end of the year. Is the self employment tax calculated before other tax is taken off or afer [net or gross amont]
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3 users responded in this post
Ask a good accountant.
all you have to do is know how much you made than look at the tax forms, which you can get at the library, and look at the chart and see how much you need to pay by how much you made
A corporation doesn’t pay self-employment tax.
Self-employment tax is calculated on your earnings in self-employment, not your adjusted gross income.
Specifically, you add together profit (or loss) from
Schedule F,
Schedule C
Schedule C-EZ
Partnerships K-1 (Form 1065)
Partnerships K-1 (Form 1065B)
You multiply the net earnings/loss by 92.35% to get total taxable earnings.
If the total is less than $400, you don’t owe SE tax. (You have the option of paying some, anyhow, if you want to and certain conditions apply. That’s useful if you need to build up your earnings record.)
If your total is at least $400 but less than $94200, you pay 15.3%
If your total is more than $94200, then you owe 2.9% plus $11680.80
Half of your self-employment tax is deductible from your adjusted gross income before calculating income tax.
The link below is the instructions for SE tax. The book is quite readable, if you care to RTFM.
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