Self-Employment Tax Starts With Profit

Описание: Why can freelancers owe both federal income tax and self-employment tax? Follow Grace, a fictional freelance designer, as she finds the number her U.S. self-employment tax calculator needs: projected annual business profit.

Try the self-employment tax calculator: https://selfemployedmath.com/self-emp...
Explore more tools: https://selfemployedmath.com/

Grace starts with $40,000 in projected annual receipts and $8,000 in assumed deductible business expenses. That leaves $32,000 in projected profit before taxes. See how that figure feeds the self-employment tax estimate for Social Security and Medicare, which inputs matter for federal income tax, and how a tax reserve relates to estimated payments.

0:00 Why Grace sees two taxes
0:35 Annual receipts and business expenses
1:17 Finding projected annual profit
1:37 Self-employment tax vs. income tax
2:24 Using the self-employment tax calculator
3:01 Tax reserves and estimated payments
3:22 Grace’s checklist

Watch next: Your $50 Hourly Rate Is Not $50 an Hour —    • Your $50 Hourly Rate Is Not $50 an Hour  
IRS guide to self-employment tax: https://www.irs.gov/businesses/small-...

Original audio in English. English and Spanish (Mexico) captions are available in the player settings.

Fictional example for education. Check the tax year and your own inputs. Illustrated story with synthetic narration.

Music: “Signal to Noise (No Piano Melody)” and “Discovery” by Scott Buckley — CC BY 4.0. https://www.scottbuckley.com.au/
Excerpted, crossfaded and mixed beneath narration. https://creativecommons.org/licenses/...

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