Do I Have to Pay Self-Employment Tax Separate From Income Tax?

[pampchefrhondab]

Hey Everyone,

I'm trying to finish my taxes before Tuesday (I know nothing like waiting until the last minute). I'm using a software program so I'm not sure how all of this works since I'm not reading through some of the books, but do I have to pay a self employement tax separate from the tax that is already charged on the income? That's what the form seems to be doing, but it's giving me a 1/2 credit. If this is the case, do I have to pay that on what I won from my shopping spree? I haven't finished entering my deductions yet, so some of this will be deducted from gifts I've given to hosts.

Another question - what is the Business Activity Code we are supposed to use? I couldn't find any info. on this. I think someone asked this before, but I couldn't find it when I did a search.

Any help you can give me would be very much appreciated .

 

[Lisa/ChefBear]

Shopping spree, I believe you would be able to put that back into Kit Enhancement part of your taxes, where you use those products either as gifts or to show your guests, so it would be a wash.

For other parts, sorry I can't help.

I'm also not done with my taxes

Lisa

 

[tlennhoff]

Can't help you but can sympathize. My husband just did the basics of our taxes but left entering the expenses to me so now I know what I'll be doing tomorrow as I'm out of town this weekend.

 

[lisacb77]

If you reinvested the products from the spree into your business, you claim the income (as it's on the 1099) but also the expense value since it's reinvested. HTH. That saved me a ton!

 

[AnaCash]

Hi there!

I understand the stress of trying to finish taxes before the deadline, but don't worry, I'm here to help. As a self-employed consultant, you are responsible for paying self-employment tax on your income in addition to regular income tax. The form you are filling out is most likely the Schedule SE, which calculates your self-employment tax. It's important to pay this tax on all of your income, including any winnings from your shopping spree. However, you can deduct any business-related expenses, such as gifts to hosts, from your total income before calculating the self-employment tax.

As for the Business Activity Code, this is a code that identifies your type of business. For Pampered Chef consultants, the code is usually 454390. It's always a good idea to double check with your tax preparer or the IRS to make sure you are using the correct code for your specific business.

I hope this helps clarify things for you. If you have any more questions, don't hesitate to reach out. Best of luck with your taxes!