So, will I have to pay the $1000 or the one half of self employment tax? ($500)
and will this $500 effect my EIC?
2007-01-26 09:59:57 · 3 answers · asked by Ashley 2 in Business & Finance ➔ Taxes ➔ United States
The one-half deduction for self-employment tax is a "deduction" and not a "credit" so the actual tax effect will be much lower. For example, if you are in the 15% bracket, a $500 deduction will only reduce your taxes by $75 ($500 x 15%).
EIC is calculated on Self-Employment Income and AGI and you get the lower amount. The $500 deduction does reduce your AGI.
2007-01-26 11:16:02 · answer #1 · answered by Wayne Z 7 · 0⤊ 0⤋
i think you should go to www.expresstaxrefund.com and use the calculator on the website.
2007-01-26 10:12:17 · answer #2 · answered by john_zoltan 1 · 0⤊ 0⤋
it is better to take an advice from an expert
2007-01-26 21:21:20 · answer #3 · answered by Judy C 1 · 0⤊ 0⤋