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June 6, 2019
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TT says I don't owe self employment taxes, but I'm almost certain I do. I netted $427. Shouldn't SE taxes be calculated? TT is sure I don't owe SE taxes, but...

  • June 6, 2019
  • 1 reply
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This income is reported on a 1099-MISC. It was $1250, but after the home office deduction and commissions, only $427 was left. I tried a few times to get SE tax to calculate, but TT won't allow it. 

Best answer by ThomasM

TurboTax is correct.  You won't pay SE tax on your $427 net income from self employment.

That's because IRS takes your net SE income figure and multiplies it by .9235, which then becomes your base on which to calculate SE tax.  If that base figure is below $400, then you don't pay any SE tax.  Yours is 427 x .9235 = 394.

A bit more income and you would have paid the tax, but you're just under the wire.

1 reply

ThomasMAnswer
Employee
June 6, 2019

TurboTax is correct.  You won't pay SE tax on your $427 net income from self employment.

That's because IRS takes your net SE income figure and multiplies it by .9235, which then becomes your base on which to calculate SE tax.  If that base figure is below $400, then you don't pay any SE tax.  Yours is 427 x .9235 = 394.

A bit more income and you would have paid the tax, but you're just under the wire.