@RoopamK253234 wrote:
I do odd baby sitting jobs and at end of year I file tax. I don’t get any W2 or self employment form. I have been paying my taxes only when I file return. Typically I will earn enough to get 4 credits and pay social security tax
my concern is that this year my tax paid is 0 even though I have similar income. It’s because earned income credit made up for tax I was supposed to pay. Does it mean I paid no social security tax and I will not get any credits. Thanks in advance your replies
IRS.gov - Self-Employed Individual Tax
As a self-employed individual, generally you are required to file an annual return and pay estimated tax quarterly.
Self-employed individuals generally must pay self-employment tax (SE tax) as well as income tax. SE tax is a Social Security and Medicare tax primarily for individuals who work for themselves. It is similar to the Social Security and Medicare taxes withheld from the pay of most wage earners. In general, anytime the wording "self-employment tax" is used, it only refers to Social Security and Medicare taxes and not any other tax (like income tax).
You have to file an income tax return if your net earnings from self-employment were $400 or more. If your net earnings from self-employment were less than $400, you still have to file an income tax return if you meet any other filing requirement listed in the Form 1040 and 1040-SR instructions
Just make sure you are filing your taxes correctly - Let's say that you had self-employed income from baby-sitting in the amount of $ 12,000. You do your taxes correctly and this income from self-employment (Schedule C and Schedule SE) will determine the amount of Self-employment taxes you have to pay. Self-employment taxes are a self-employed person's Social Security and Medicare taxes.
Your net income from Sch. C is your income from the business and your income tax and any credits are applied to that figure as you work through the 1040. This may be nothing or something based on the INCOME TAX RETURN. Whatever figure that turns out to be - zero, a credit or an amount owned - is then applied to the amount that you owe from Schedule SE (your self-employment tax). SE tax is about 15% of your self employment income from Sch C.
Get help in the prep of your taxes.
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