# Social Security and Medicare



## DentonLyfter (Apr 14, 2018)

I have worn my fingers out looking for this info, so I am just going to ask. When and where you pay these? My Quickbooks has a quarterly notation, but I wouldn’t know where to send them regardless. Is the amount minimal enough (I know around 15% net) to just pay at tax time? Thanks for any (useful) feedback.
And I did not intentionally type Medicar, although that is kind of funny, and I am sure my car will need it VERY soon.


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## Older Chauffeur (Oct 16, 2014)

I think if you used a DIY tax prep program like TurboTax, there is a step that sets you up for quarterly payments. But if you owe less than $1000 at filing time, in general you don't have to pay quarterly. The Social Security and Medicare taxes you pay through an employer are called FICA, with you and your employer each paying half of the 15.3%. The tax you're asking about is called SECA, named for the Self Employment Contribution Act, and you pay that 15.3% on net profits, with a threshold amount of net profits of $400. Less than that in profits, you don't owe any SECA.
If you have a regular job in addition to rideshare, you can increase your federal witholding to make sure you have enough paid in. Your total tax obligation at tax time includes both income tax and SECA/FECA.

Here's a link to the IRS publication on quarterly taxes.
https://www.irs.gov/pub/irs-pdf/f1040es.pdf

Disclosure: I'm not a tax professional.


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## DentonLyfter (Apr 14, 2018)

Thank you. This was the most helpful answer to any question I have ever posed. I appreciate it.


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## UberTaxPro (Oct 3, 2014)

SECA is often referred to as self-employment tax (SE tax), even by the IRS. 
This might also help you out:
https://www.irs.gov/businesses/small-businesses-self-employed/self-employed-individuals-tax-center


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## SEAL Team 5 (Dec 19, 2015)

DentonLyfter said:


> Thank you. This was the most helpful answer to any question I have ever posed. I appreciate it.


Yes, Older Chauffeur and Uber Tax Pro are a must to follow for tax advice. I've been in the fare for hire business for nearly 20 years and I still learn valuable tax information from these two.


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## Older Chauffeur (Oct 16, 2014)

SEAL Team 5 ,
You are too kind, putting me the esteemed company of UberTaxPro, but I appreciate it anyway.


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## Friendly Jack (Nov 17, 2015)

Older Chauffeur said:


> I think if you used a DIY tax prep program like TurboTax, there is a step that sets you up for quarterly payments. But if you owe less than $1000 at filing time, in general you don't have to pay quarterly. The Social Security and Medicare taxes you pay through an employer are called FICA, with you and your employer each paying half of the 15.3%. The tax you're asking about is called SECA, named for the Self Employment Contribution Act, and you pay that 15.3% on net profits, with a threshold amount of net profits of $400. Less than that in profits, you don't owe any SECA.
> If you have a regular job in addition to rideshare, you can increase your federal witholding to make sure you have enough paid in. Your total tax obligation at tax time includes both income tax and SECA/FECA.
> 
> Here's a link to the IRS publication on quarterly taxes.
> ...


Also, I believe that the requirement to pay quarterly tax deposits is satisfied if you have paid at least 90% of the total tax amount owed last tax year. Many people can use this to their advantage where self-employment income is irregular.


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## Older Chauffeur (Oct 16, 2014)

Friendly Jack said:


> Also, I believe that the requirement to pay quarterly tax deposits is satisfied if you have paid at least 90% of the total tax amount owed last tax year. Many people can use this to their advantage where self-employment income is irregular.


Close- if you have paid in an amount equal to at least 100% of what your tax liability was LAST year, or 90% of what it winds up for the current year, there won't be a penalty for not paying quarterly. It gets a little complicated, so that's why I said "in general" in my post.


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## Stevie The magic Unicorn (Apr 3, 2018)

Older Chauffeur said:


> Close- if you have paid in an amount equal to at least 100% of what your tax liability was LAST year, or 90% of what it winds up for the current year, there won't be a penalty for not paying quarterly. It gets a little complicated, so that's why I said "in general" in my post.


And this is why i still have withholding jacked up to almost double what they should be on my w2 job at WDW


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## 404NofFound (Jun 13, 2018)

Older Chauffeur said:


> But if you owe less than $1000 at filing time, in general you don't have to pay quarterly.


If that is the case do I still have to file and pay nothing, or can I wait til the end of the year to file, and do the amounts add up over quarters to equal 1000 thus requiring me to pay, or is each quarter have its own income to consider?


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## Older Chauffeur (Oct 16, 2014)

404NofFound said:


> If that is the case do I still have to file and pay nothing, or can I wait til the end of the year to file, and do the amounts add up over quarters to equal 1000 thus requiring me to pay, or is each quarter have its own income to consider?


You don't actually file quarterly, you just pay in an estimated amount based on what you think you will owe at tax time in April. Worse case the IRS tells you to make quarterly estimated payments in the future; there may be a penalty as well.

Disclosure: I'm not a tax professional.


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## Lee239 (Mar 24, 2017)

Older Chauffeur said:


> I think if you used a DIY tax prep program like TurboTax, there is a step that sets you up for quarterly payments. But if you owe less than $1000 at filing time, in general you don't have to pay quarterly. The Social Security and Medicare taxes you pay through an employer are called FICA, with you and your employer each paying half of the 15.3%. The tax you're asking about is called SECA, named for the Self Employment Contribution Act, and you pay that 15.3% on net profits, with a threshold amount of net profits of $400. Less than that in profits, you don't owe any SECA.
> If you have a regular job in addition to rideshare, you can increase your federal witholding to make sure you have enough paid in. Your total tax obligation at tax time includes both income tax and SECA/FECA.
> 
> Here's a link to the IRS publication on quarterly taxes.
> ...


Cool great info, I did not know about this but only drove 45 days and had a loss on my taxes from Uber.

I bet a lot of people are not paying into SECA because they think if they use the standard deduction and they don't owe taxes they don't owe SECA.


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## LAuberX (Jun 3, 2014)

Social security is based on the average of your highest 35 years of contributions... making nothing and paying no taxes will hurt come retirement time.

the more you make, the higher your taxes, the bigger your check will be come retirement age.

Older Chauffeur and UberTaxPro please weigh in if I'm not right!


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## UberTaxPro (Oct 3, 2014)

LAuberX said:


> Social security is based on the average of your highest 35 years of contributions... making nothing and paying no taxes will hurt come retirement time.
> 
> the more you make, the higher your taxes, the bigger your check will be come retirement age.
> 
> Older Chauffeur and UberTaxPro please weigh in if I'm not right!


Social Security is the largest retirement plan in the country! It uses a complicated formula based on 35 years...https://www.fool.com/retirement/2018/05/26/heres-how-the-social-security-retirement-benefit-f.aspx
Yes, the more you pay the more you get.


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