Discuss how income from self-employment is calculated, reported, and taxed? Assume a taxpayer had $50,000 of receipts for services provided as a web designer. They also had $25,000 of expenses related to that activity. Assume they are at the 20% marginal tax rate because of other income. Where would they calculate and report this? Would they also owe the equivalent of social security tax and Medicare tax on this? If so, roughly how much and where would it be reported and calculated? Finally, when are they required to pay the taxes due on this income? Is it at year-end or more frequently?

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Total receipts 50000 Tota expenses for that activity or service rendered 25000 Margin or profit Rece... View the full answer