OTHER TAXES

There are some additional taxes that are not based on net taxable income. Here are some of them.

Self-Employment Tax

There is an additional tax levied on all the earned income of self-employed individuals. The rate is 15.3% for the first $160,200 and 2.9% for all the amounts above this threshold, assuming all the earnings are from self-employment. Typical income subject to this tax would be from the services provided as an independent contractor, business conducted personally (schedule C), and pass-through income from a service partnership. Net earnings from S Corporation are not subject to this tax.

Unreported Social Security and Medicare Tax

a) If you received tips of $20 or more in any month and did not report the full amount to your employer, you must pay the Social Security and Medicare or railroad retirement (RRTA) tax on the unreported tips. You must also pay this tax if your Form(s) W-2 shows allocated tips you include in your income. Use Form 4137.

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