Do you have a side gig (parttime job)? If yes, most likely, you have to pay Selfemployment tax (SE tax) and also income tax since you are selfemployed. Even if you work a fulltime job, you can still be selfemployed with your side job. I'll cover how to calculate your selfemployment tax in this short video.
Your selfemployment tax is 15.3%. That rate comes from adding 12.4% for Social Security and 2.9% for Medicare. Selfemployment tax applies to net income or net profit. The fast way to calculate your selfemployment tax is to take your net profit and multiple the profit by 14.13%.

Example: Gross income for being selfemployed is $26,000. Your deductions are $6,000. That leaves you with a net profit or net income of $20,000. Take 20,000 and multiply by 92.35%. Now take the $18,470 and multiple by 15.3%, and that is your selfemployment tax. $18,470 x 15.3% = $2,825.91. I rounded to $2,826.00 in the video.

Examples of selfemployed side hustle jobs:
YouTubers
Rideshare driver Uber or Lyft
Delivery driver
Wedding Photographer on the weekend
Dog walker
Sell items online
Graphic designer
Online writer
Virtual assistant


Chapters:
0:00 Intro
0:42 Quick method
1:15 Schedule C Net Profit
4:00 Schedule SE
4:38 SE tax calculated in Excel
5:01 Social Security and Medicare taxes
6:25 Why 92.35%?
7:48 Pay taxes quarterly

Most likely, you need to pay your taxes quarterly to the IRS. I'll discuss paying your taxes online in another video.

Terms:
Net Profit or net income Gross income minus your deductions. This is done on Schedule C.
1099NEC Form Nonemployment compensation form. You usually get it annually in January and have to claim this as Gross Income on Schedule C.

According to the IRS, who is selfemployed?
Generally, you are selfemployed if any of the following apply to you.
You carry on a trade or business as a sole proprietor or an independent contractor.
You are a member of a partnership that carries on a trade or business.
You are otherwise in business for yourself (including a parttime
IRS webpage https://www.irs.gov/businesses/small...

#selfemployed #msexcel #chrismenard #chrismenardtraining

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