Again I don't have a Flipping clue. Ok that was a lot funnier in my head. But seriously, I was reading several posts on here about SE taxes and got a little confused.
What exactly gets taxed? Is it all profits the properties make or just the portion(s) that I payout to myself?
Also I saw someone mention that I have to pay SE tax and regular taxes. What is the regular taxes? Is that like the income tax we pay if we work for someone else?
My plan is to take 50% of the profits earned from each property and keep it in the business for future deals. The other 50% would be for my pay. Would I be paying these taxes on the entire 100% or just the 50%?
Thank you for your time,
why are you looking for a tax advise on a public forum? get an accountant and avoid the hassle.
SE taxes are for social security and medicare. The self-employment tax rate is 15.3 percent of self-employment profit. The self-employment tax is calculated on Schedule SE, Self-Employment Tax. The self-employment tax is reported on Form 1040, U.S. Individual Income Tax Return.
By "regular taxes," you probably mean your marginal tax rate which refers to the tax rates brackets that are published each year.
You pay tax on all the profit, doesn't matter what you do with it.
SE Tax is how the government makes self-employed people pay in SS, Medicare, ect that are normally deducted from a paycheck.
With those taxes the employer pays half, employee pays half. When you're self employed you pay both halves at the 15+%
But then 1/2 is deductible also- just to add confusion. haha It's a multi step situation.
Great thanks. That actually makes sense to me. So there really isn't anything different from the taxes I pay in my regular job and being Self Employed except that I pay both halves of the Social Security and Medicare taxes.
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