[Hidden-tech] Calculating soc sec

[Duane Dale]

Don't miss the deduction for 1/2 of the self-employed (social security) tax.
That deduction is calculated at line 6 of Schedule SE and then transferred
to line 27 of Form 1040 (2005).
Turbo Tax or Tax Cut should do that for you automatically, of course. I
think the idea is that you don't pay tax on the "employer" half of the SE
tax.

-- Duane Dale


On 3/9/06, W. Cody Anderson <cody.anderson at evenerable.com> wrote:
>
>   ** Be a Good Dobee and help the group, you must be counted to post .
>   ** Fill out the survey/skills inventory in the member's area.
>
>
> Mary,
>
> Assuming you're in the midst of preparing your taxes, tax software such as
> TurboTax will handle "self employment tax".  This is comprised of two
> things:
>
> 1 - the Medicare and Social Security taxes (7.65% of gross pay, I believe)
> that "payrolled" people have withheld from their paychecks.
> 2 - the Medicare and Social Security MATCHING contributions that would
> also
> be paid by the person's employer if they were a W-2 employee.
>
> Also, there is a gross pay limit ($90,000?), over which you need not pay
> SS
> contributions.  Medicare has no such limit, so you pay those forever.
>
> My company, Evenerable Group, Ltd., is an S corporation.  To avoid IRS
> audits, I've been advised by my accountant that I should pay myself a
> paycheck and get a W-2 at the end of the year.  I also use QuickBooks
> payroll, which handles figuring out all the tax calculations, etc.  I send
> my taxes withheld to the IRS on a monthly basis.
>
> My recommendation for getting 2005 behind you: get thee to TurboTax or a
> tax
> preparer.  For 2006, I'd also consider paying yourself a regular paycheck,
> if only to keep yourself honest and out of the IRS Penalty Box.
>
> Best,
> Cody
>
>
> -----Original Message-----
> From: hidden-discuss-bounces at lists.hidden-tech.net
> [mailto:hidden-discuss-bounces at lists.hidden-tech.net] On Behalf Of Mary
> Malmros
> Sent: Wednesday, March 08, 2006 7:49 PM
> To: Hidden Tech
> Subject: [Hidden-tech] Calculating soc sec
>
>   ** Be a Good Dobee and help the group, you must be counted to post .
>   ** Fill out the survey/skills inventory in the member's area.
>
>
> Hey folks,
>
> Does anyone have an accurate formula for calculating social security
> contributions for a self-employed/1099 type person?  I stumbled my way
> through the IRS site, but I'm not 100% sure I got it right.
>
> TIA,
>
> --
> Mary Malmros
> malmros at verizon.net
>      Some days you're the windshield, other days you're the bug.
>
>
>
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