# Self-employment tax?



## Aharm (Aug 14, 2015)

I have a self-employment tax of $2,525 listed in my turbotax software.

Is this common for everyone? Do i have to pay this in addition to the federal tax? Or did i do something wrong?

Ty. Im almost done.


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## Older Chauffeur (Oct 16, 2014)

Aharm said:


> I have a self-employment tax of $2,525 listed in my turbotax software.
> 
> Is this common for everyone? Do i have to pay this in addition to the federal tax? Or did i do something wrong?
> 
> Ty. Im almost done.


I think something is definitely wrong. Have you deducted all the Uber fees and your expenses? Could the $2525 be the net profit that is subject to tax? Which TT version and format are you using?
Self employment taxes (FICA) are roughly 15.3% of your net profits of at least $400. So you would owe $2525 in FICA if your net profit was $16,500. It is in addition to regular income tax.


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## Aharm (Aug 14, 2015)

Older Chauffeur said:


> I think something is definitely wrong. Have you deducted all the Uber fees and your expenses? Could the $2525 be the net profit that is subject to tax? Which TT version and format are you using?
> Self employment taxes (FICA) are roughly 15.3% of your net profits of at least $400. So you would owe $2525 in FICA if your net profit was $16,500. It is in addition to regular income tax.


yeaah my net profit was 17k.

so everyone pays an income tax? what is your guys net profit? this is my only job.


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## Older Chauffeur (Oct 16, 2014)

Aharm said:


> yeaah my net profit was 17k.
> 
> so everyone pays an income tax? what is your guys net profit? this is my only job.


Have you paid estimated quarterly taxes? If not, there may be a penalty. The IRS likes to collect throughout the year from self employed people, just as they do from W2 employees. TT should figure what you owe in income taxes based on your filing status. My guess is you won't be hit too hard other than the FICA. They'll also figure your CA state tax for you.
Good luck.
(I thought something was off because I haven't read of anyone making a net profit like that. Did you track/deduct dead miles?)


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## Aharm (Aug 14, 2015)

Older Chauffeur said:


> Have you paid estimated quarterly taxes? If not, there may be a penalty. The IRS likes to collect throughout the year from self employed people, just as they do from W2 employees. TT should figure what you owe in income taxes based on your filing status. My guess is you won't be hit too hard other than the FICA. They'll also figure your CA state tax for you.
> Good luck.
> (I thought something was off because I haven't read of anyone making a net profit like that. Did you track/deduct dead miles?)


what is full time peoples net profits? i deducted standard mile deduction.

i honestly probably forgot some stuff, this is my first time...


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## Older Chauffeur (Oct 16, 2014)

Have you totaled the deposits in your bank account to see if that figure matches what's left after deducting all Uber's fees from what they claim they paid you? The more I think about it, the more I go back to thinking something is off with your figures.


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## Older Chauffeur (Oct 16, 2014)

Aharm said:


> what is full time peoples net profits? i deducted standard mile deduction.
> 
> i honestly probably forgot some stuff, this is my first time...


Okay, how many miles are you claiming? How many does Uber show you had pax?


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## Aharm (Aug 14, 2015)

Older Chauffeur said:


> Okay, how many miles are you claiming? How many does Uber show you had pax?


gross income total: 49.5k

uber claims 11k miles, lyft claims 3k miles.

im claiming 34k business miles, 15k commuting miles, 6k personal, is this too little? for the first half of the year i was working part time and did not log all miles is my problem.


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## Older Chauffeur (Oct 16, 2014)

Aharm said:


> uber claims 11k, lyft claims 3k.
> 
> im claiming 34k business miles, 15k commuting miles, 6k personal, is this too little? for the first half of the year i was working part time and did not log all miles is my problem.


Okay, SF pays $.90 per mile less 20%, right? Assume Lyft is the same for my example. So for 14k paid pax miles:
That's $12,600 without incentives, tips, bonuses, etc. Minus 20% leaves you $10,080. Subtract $18,360 for 34k miles @ $.54 per mile, and you have a net operating loss of -$8280.
Have you totaled your bank deposits?
Even if you claimed only the paid 14k miles, you would still have a profit of $2520 before cell phone and other business deductions.


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## Older Chauffeur (Oct 16, 2014)

Regarding the SMR, the IRS wants a contemporaneous mileage log. If you are audited, they can disallow the deduction for any miles you can't substantiate with records made over time with dates, odometer readings and the business purpose. If you don't have a log, the safest route might be to claim only those miles in the Uber/Lyft records. 
Again, I'm not a tax pro, and I'm looking at a worst-case scenario.


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## Aharm (Aug 14, 2015)

Older Chauffeur said:


> Okay, SF pays $.90 per mile less 20%, right? Assume Lyft is the same for my example. So for 14k paid pax miles:
> That's $12,600 without incentives, tips, bonuses, etc. Minus 20% leaves you $10,080. Subtract $18,360 for 34k miles @ $.54 per mile, and you have a net operating loss of -$8280.
> Have you totaled your bank deposits?
> Even if you claimed only the paid 14k miles, you would still have a profit of $2520 before cell phone and other business deductions.


my total gross income is 49.5k

i had 14.5k from misc form (uber/lyft) and 34k from 1099-K


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## Aharm (Aug 14, 2015)

Older Chauffeur said:


> Regarding the SMR, the IRS wants a contemporaneous mileage log. If you are audited, they can disallow the deduction for any miles you can't substantiate with records made over time with dates, odometer readings and the business purpose. If you don't have a log, the safest route might be to claim only those miles in the Uber/Lyft records.
> Again, I'm not a tax pro, and I'm looking at a worst-case scenario.


yes thats why im being honest, just gonna pay like 6k in taxes and log everything this year. Aiming for zero taxes next year.


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## Older Chauffeur (Oct 16, 2014)

Okay, there are fees you deduct from the gross on the 1099k to get a figure that, along with the 1099 misc numbers, match your deposits. From that you take your mileage, business use of phone, water, mints, whatever you bought for convenience of pax.
But how do you get to $34k with only 14k miles? The 1099k is what the customers paid with credit card transactions.
On the 1099 misc, use the info in box 7, non- employee compensation.
Honesty is indeed the best policy when it comes to dealing with the IRS. But OTOH, you shouldn't be paying more than you actually owe, taking advantage of the honest business deductions you are allowed.


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