# Self employment tax and Adjusted Gross Income for Someone who's sole income is from Uber



## IckyDoody (Sep 18, 2015)

A hypothetical:

Gross $4300
Gross minus uber $3000
Miles 4300

This is my only income, how do I calculate self employment tax? Using the standard mileage rate, my taxable income is 3000 - (4300 * .575) = $572, correct? Is my self employment tax in this scenario 572 * .153 = $87.50?


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## mls55 (May 27, 2015)

572*.9235 = 528 *.153 = 81


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## IckyDoody (Sep 18, 2015)

I'm sorry, I'm dense, where does this .92 constant come from?


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## StarzykCPA (Aug 6, 2015)

You can fill out a mock Schedule SE to figure this out: https://www.irs.gov/pub/irs-pdf/f1040sse.pdf

The .9235 is line 4 on the Schedule.


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## IckyDoody (Sep 18, 2015)

Thnx for the replies.


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## CowboyMC (Aug 26, 2014)

If you are doing this to figure out your estimated quarterly tax payments, also include income tax on your net income. Don't forget your state income taxes.


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## IckyDoody (Sep 18, 2015)

StarzykCPA said:


> You can fill out a mock Schedule SE to figure this out: https://www.irs.gov/pub/irs-pdf/f1040sse.pdf
> 
> The .9235 is line 4 on the Schedule.


Thank you for the response. Another question in the scenario of the op; Will $572 be my AGI and NOT my taxable income?

The way I'm understand it, I use the schedule C to arrive at $572 and then enter that number on line 12 of 1040, so assuming I have no further adjustments between line 23 and 35 of the 1040 then $572 is my AGI?

I can then take the standard deduction ($6200) and exemption ($3950) and have zero taxable income if my AGI is less than $10150? Otherwise my taxable income would be AGI - $10150?

All of my business related expenses should go on schedule C, correct?

So I need three forms to do my federal taxes: 1040, schedule C and schedule SE?

Is all of this correct?


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## StarzykCPA (Aug 6, 2015)

IckyDoody said:


> Thank you for the response. Another question in the scenario of the op; Will $572 be my AGI and NOT my taxable income?
> 
> The way I'm understand it, I use the schedule C to arrive at $572 and then enter that number on line 12 of 1040, so assuming I have no further adjustments between line 23 and 35 of the 1040 then $572 is my AGI?
> 
> ...


Yes, you are correct. In your case, your taxable income is your AGI less your standard deduction and exemption. And your AGI would be equal to your Schedule C income (line 12 of Form 1040) less a deduction for 1/2 of your self employment tax, if you have no other sources of income and no other adjustments.

You will still owe some self employment tax since that would be calculated on Schedule SE and is not affected by the standard deduction/exemptions.


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## IckyDoody (Sep 18, 2015)

Man, thanks for you help. I now have a good idea of what I would owe monthly and how my earnings situation affects healthcare. Thanks again.


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## JMBF831 (Aug 13, 2015)

Thanks guys, so if we are earning less than 10,150 (after standard deduction of 6200 and exemption of 3950) our taxable income is 0?

Meaning we would only have to pay state and self employment tax? And self employment #s were done above, the .9253 and .153. So then if I am not mistaken, state tax is...? (California, for me looks like 7.5%)?

In a nutshell, for me, since I am a newbie:

If I am understanding the basics, if we net under $10,150 we pay the (.9253, .153) figure above + 7.5% tax (in California)? Thank you in advance, fellas! My first year as a ride share driver.

Basic example in my mind (hypothetical)
Net: $4388
Miles: 3760 (.575) = $2162
$4388 - $2162 = $2225
$2225 (.9235) = $2055 (.153) = $314 (self employment tax due)
Then 7.5% of $2225 for state tax = $2225 (.07) = $155 (State tax due)

$314 (self employment)
$155 (State tax)
Total liability: $470 due

Does this look correct? Thank you so much.


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## IckyDoody (Sep 18, 2015)

I think you use 'net' for two different numbers in your post. $4388 is your payout?


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## JMBF831 (Aug 13, 2015)

IckyDoody said:


> I think you use 'net' for two different numbers in your post. $4388 is your payout?


Net is my "Earnings" but my understanding is that my taxable income is not this full amount ($4388) but rather the amount after mileage deduction ($4388 -$2162) = $2225


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## IckyDoody (Sep 18, 2015)

K. 2225 I believe is your adjusted gross income. Your taxable income is zero. You also get a standard deduction for your cali taxes, 7kish. As far as I can tell, you would owe 0 state income taxes on your uber earnings. Let the guys who know chime in.


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## IckyDoody (Sep 18, 2015)

Oh, and btw, that's a nice dollar to mile ratio you have there. What part of California do you live in?


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