Estimated Self-Employment Tax
September 10, 2011 6:26 AM Subscribe
I am trying to learn more/understand better my new tax situation as an independent consultant, and was hoping someone could help me with the following questions:
. How do I compute my Net Earnings From Self-Employment (NESE)? What calculation is used?
. Since I am excluded from Federal and State tax (my tax domicile is TX) for my foreign-earned income amount (I estimate it would be $87,500 for 2011) - can you break down how I can get the estimated tax payment amount for 2011?
I tried to figure #2 out on my own:
$87,500 Foreign-Earned Income in 2011
$9,100.00 is the amount for Social Security Tax (10.4%) on the first $106,800 of net self-employment income.
$2,448.23 is the amount for Medicare Tax (2.9%) on all net self-employment income.
$11,548.23 is the Total Estimated Self-Employment Tax for 2011. Is this correct?
3. When I file my tax return for 2011 will I then factor in the business expenses fully deductible against income? i.e. Legal Fees, Taxe Fees, Storage Fees etc.? What about the reimbursements already paid to me in 2011, how do I handle these?