Do I Need to Pay Social Security Taxes with TurboTax?

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Discussion Overview

The thread discusses the responsibilities and processes related to paying Social Security taxes while using TurboTax, particularly for self-employed individuals. Participants share their experiences and seek clarification on how these taxes are calculated and reported.

Discussion Character

  • Anecdotal
  • Technical explanation

Main Points Raised

  • One participant expresses uncertainty about Social Security taxes and mentions that their director, who has been a consultant for 12 years, does not pay them.
  • Another participant suggests that Social Security taxes are only due when there is a profit and that TurboTax calculates these automatically on the long form.
  • One participant inquires if TurboTax factors in Social Security taxes when entering information.
  • A participant provides information about self-employment and the requirement to report earnings directly to the IRS, noting that if net earnings exceed $400, a Schedule SE must be filed.
  • Another participant confirms that TurboTax generates the necessary forms for reporting earned profit and mentions that self-employed individuals pay both their share and the employer's share of Social Security taxes.

Areas of Agreement / Disagreement

Views differ regarding the necessity and process of paying Social Security taxes, with some participants sharing personal experiences while others provide information on tax reporting requirements.

Contextual Notes

The discussion reflects personal experiences and interpretations of tax responsibilities among self-employed individuals, particularly within the context of using TurboTax for filing.

Who May Find This Useful

Consultants who are self-employed and looking for insights on handling Social Security taxes while using tax software may find this discussion relevant.

C
ChefBeckyD
Gold Member
Messages
20,320
Okay - you may think I am really a ditz...but I'm doing taxes, and DH just asked me what I do about SS taxes - and I haven't been doing anything. I asked my director, and she has been doing PC for 12 years, and says she doesn't pay them either.....but now, DH has me worried, so I'm wondering, what do you all do about them?
 
Not sure but don't you have to pay them only when you have a profit, it is calculated automatically on your tax return when you do the long form. The tax program automatically generates the form and you pay it then or it comes out of your withholding.
 
  • Thread starter
  • #3
So if I'm doing Turbo-Tax, and entering in all of my info, it's factoring in SS tax?
 
ChefBeckyD said:
So if I'm doing Turbo-Tax, and entering in all of my info, it's factoring in SS tax?
Click to expand...

Self-employed
Most people who pay into Social Security work for an employer. Their employer deducts Social Security taxes from their paycheck, matches that contribution and sends taxes to the Internal Revenue Service (IRS) and reports wages to Social Security. But self-employed people must report their earnings and pay their taxes directly to IRS.

You are self-employed if you operate a trade, business or profession, either by yourself or as a partner. You report your earnings for Social Security when you file your federal income tax return. If your net earnings are $400 or more in a year, you must report your earnings on Schedule SE, in addition to the other tax forms you must file.

If you and your husband operate a business together, you are entitled to receive Social Security credits as a partner. Be sure to file a separate Schedule SE, even though you and your husband file a joint income tax return. If you do not file a separate self-employment report, you will not get Social Security benefits from your own work, because all of the earnings will be reported on your husband’s record.
 
The above is from the SSA site...

Also see:
http://www.irs.gov/businesses/small/article/0,,id=98846,00.html
 
I attach that Schedule to my form to pay them in.
 
ChefBeckyD said:
So if I'm doing Turbo-Tax, and entering in all of my info, it's factoring in SS tax?
Click to expand...
Yes, what Janet said. Turbo Tax would automatically generate the form showing your earned profit. You pay your share and the share an employer would pay, so it's a little more. Good thing is all your expenses deducted it's not so much.
 

Frequently Asked Questions

Do I need to pay Social Security taxes if I am self-employed?

Yes, if you are self-employed, you are responsible for paying Social Security taxes. This is typically done through the Self-Employment Contributions Act (SECA), which requires you to pay both the employer and employee portions of Social Security and Medicare taxes.

How does TurboTax help with calculating Social Security taxes?

TurboTax provides a straightforward way to calculate your Social Security taxes by guiding you through the process of reporting your self-employment income. It automatically calculates the taxes owed based on the income you report and applies the current tax rates.

Can I deduct any expenses from my self-employment income before calculating Social Security taxes?

Yes, you can deduct business expenses from your self-employment income before calculating your Social Security taxes. This includes expenses related to your direct sales business, such as supplies, marketing, and travel costs, which can help lower your taxable income.

What if I made less than the minimum threshold for paying Social Security taxes?

If your net earnings from self-employment are less than $400 for the year, you are not required to pay Social Security taxes. However, you are still encouraged to report your income, as it may affect your eligibility for certain benefits.

Will TurboTax guide me on how to pay my Social Security taxes?

Yes, TurboTax provides guidance on how to pay your Social Security taxes. After calculating your taxes, it will offer options for payment, including electronic payment methods and instructions for mailing a check if necessary.

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