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29 March 2004 @ 11:30 pm
taxes  
Wow, do the self-employed get fucked by the IRS, and there is definitely no lube. Earn $12000 in SE income, and instead of being able to take the standard and personal deductions and pay less than $400 in tax, you get to pay nearly $1700. Taunting you by allowing you to deduct half of it... but from adjusted gross income, which is the thing you don't have any of when you are SE (that's W-2 income) is a particularly vicious touch.

It's not quite as bad for me, as I do have a small amount of W-2 income and a substantial amount in unemployment, but I'm still going to end up paying more on the same amount of income than I would if I could pool all three sources and use my deductions for all of them.
 
 
 
Tayefethtayefeth on March 30th, 2004 09:42 am (UTC)
Total income is line 22, which includes self-employment income (line 12). AGI is line 34, which you get by subtracting things like half of the self-employment tax and alimony from line 22...
Lauratavella on March 30th, 2004 11:56 am (UTC)
But that's actually *worse*, that means I pay tax on it twice, once on line 41 and once on line 55.
Tayefethtayefeth on March 30th, 2004 02:09 pm (UTC)
Yeah, it sucks. You're paying both the employer's and the employee's share of the payroll tax. Which, you'll note, Dubya hasn't yet offered to cut.