Self Employment Tax:
If the amount of your Net Earnings is $106,800 or less, multiply net earnings by 15.3%. Enter the result here and on Form 1040, line 56.
If the amount of your Net Earnings is more than $106,800, multiply your net earnings by 2.9%. Then add $13,243.20 to the result. Enter this on Form 1040, line 56.
Deduction for one-half of self-employment tax. Multiply the above result by 50%. Enter the result here and on Form 1040, line 27.
Make sure to not miss that extra 20 cents there. Which is odd seeing how they tell you early on to round every number to the nearest dollar before you put it on any kind of tax form. But don't forget that 20 cents!
Who comes up with these calculations?! Really! $13,243.20?!!
I'm off to class, but I'm going to drown my sorrows in a #1 from Chick-fil-a on the way.
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