Question

self employment tax rate

Forum|Forum|3 years ago
April 15, 2023
1 reply
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i petsitted for rover and earned $1000 last year. when my husband entered his salary in turbo tax our tax refund was $5000 but when i added my rover earnings in schedule c it went down to $4500. so it seems that half my rover earnings went to taxes. i thought self employment tax is 15.3%. so why is it computing at 50%?

A

AnnetteB6

You are correct that the self-employment tax is 15.3%. However, when you included your income, the overall tax return was affected in ways other than just by adding the self-employment tax.

The additional income is also included for the income tax calculation and it may have affected certain credits that are being claimed on your return that may be based on income.

Including your Schedule C also adds some possible deductions such as half of the self-employment tax and possibly a Qualified Business Income (QBI) deduction.

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