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| Subject:
Self-employment Tax deduction
Category: Miscellaneous Asked by: robaina-ga List Price: $8.00 |
Posted:
11 Mar 2005 22:42 PST
Expires: 11 Mar 2005 22:51 PST Question ID: 493074 |
Can someone please elaborate on the line item called "Self-Employment Tax Deduction"? I am filing Self Employment Tax on Form 1040 Schedule SE, line 5 I have obtained my "Self-Emloyment Tax". Then in line 6 I am prompted to calculate "Deduction for one-half of self employment tax" (which is obviously 50% of my "Self Employment" tax). I am then prompted to add this amount to my 1040 in line 30 The question is: what are the principles for "using" this deduction? I don't have any income other than my Self Employment Income so what can I do with this deduction. This is what the IRS says: "Self-employment tax deduction. You can deduct half of your SE tax in figuring your adjusted gross income. This deduction only affects your income tax. It does not affect either your net earnings from self-employment or your SE tax." But I frankly don't understand. I'd be happy to provide any other details that may help in reaching an answer. I understand that any answers provided do not subsititute a tax professional. |
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