Have a Tax Question? Ask a Tax Expert
Hi and welcome to our site!I need to know a. is self-employed income exempt from medicare taxes? The Net Investment Income Tax (NIIT) or so-called "Medicare tax" applies at a rate of 3.8% to certain net investment income.In general, investment income includes, but is not limited to: XXXXX XXXXX capital gains, rental and royalty income, non-qualified annuities, income from businesses involved in trading of financial instruments or commodities, and businesses that are passive activities to the taxpayer.As a self-employed person - you are actively participate in your business - therefore your self-employed income is NOT subject of NIIT.
I know I have to pay SE and estimated withholding. That is correct - your net self-employment income is subject of self-employment taxes.You pay estimate taxes during the year - but that amount will be credited toward your actual tax liability. Your actual tax liability is calculated when you prepare the tax return.
May I ask another question?
Also, what other deductions specific to my situation are available to me? The tax law allows to deduct all qualified business expenses. Business expenses are the cost of carrying on a trade or business. These expenses are usually deductible if the business is operated to make a profit. To be deductible, a business expense must be both ordinary and necessary. An ordinary expense is one that is common and accepted in your trade or business. A necessary expense is one that is helpful and appropriate for your trade or business. An expense does not have to be indispensable to be considered necessary.For additional information, refer to Publication 535, Business Expenses.
Is there a way I can always get you when I need this kind of guidance?
Sure - go ahead and post your questions.
also, are there sites where or do you have a quick list of deductions and exemptions for over 65 self employed individuals like myself?
I have signed up for 5 questions a month
Is there a way I can always get you when I need this kind of guidance?You are welcome back any time - and I personally would be more than happy to assist you.You may come back to this page - here is teh address - http://www.justanswer.com/tax/84fyt-self-employed-65-need-know-a-self-employed.htmlhttp://www.justanswer.com/finance/expert-lev-tax/
I also need to find a calculator for estimating my taxes and SE.
so, no special exemptions for age, normal business deductions. only break is on medicare tax
As tax season comes up I know I will need you at some point.
also, are there sites where or do you have a quick list of deductions and exemptions for over 65 self employed individuals like myself?The IRS provides good publications for reference.Specifically for business deductions - I suggest to use publication 535 - www.irs.gov/pub/irs-pdf/p535.pdf
I also need to find a calculator for estimating my taxes and SE.I will be glad to help you with estimations.If you want to do calculations on your own - I might suggest top use this estimator - http://www.hrblock.com/free-tax-tips-calculators/tax-estimator.html?fil_st=-1&wages=&tpage=
ok, I will try the estimator first so you can answer the hard stuff! :-)
Sure - take your time.
thanks for everything - especially for the excellent service!