Originally Posted by vvume
How is social security wages calculated from 1099-Misc? Like W-2s, is it just one half of the 15.35% FICA taxes that is included in social security wages (i.e., 92.325% of 1099-Misc listed payment) or is the entire 100% of 1099-Misc amount included as social security wages? I am trying to keep track of when I can skip paying estimated taxes of 12.4% for SST when my social security wages exceed 127,200 for 2017.
92.35%; For self-employment income earned in 2017, the self-employment tax rate is 15.3%. The rate consists of two parts: 12.4% for social security (old-age, survivors, and disability insurance) and 2.9% for Medicare (hospital insurance); in 2016 a self-employed person's net income up to $118,500 will have a FICA tax of 15.3% (the 12.4% of Social Security tax plus the 2.9% of Medicare tax). The amount in excess of $118,500 will be subject to the 2.9% Medicare tax. There is also a Medicare surtax that applies to higher income taxpayers.
On line 27 of 1040, you can deduct50% of your self-employment tax in figuring your AGI. This deduction only affects your income tax. It does not affect either your net earnings from self-employment or your self-employment tax.