Which Form 1120 C Employment 2023-2024

Hey, this is Paul Hamilton in another video. I set up these tax returns for a middle-income family making $40,000, a family of four, with no special considerations other than they had a couple of kids paying no taxes during the year. They would get about $2,000 to live in America, which is a pretty good deal. In this video, I'm going to add one thing, and that is suppose that either spouse had a side business. So, let's say the wife had a $10,000 Mary Kay business, pretty profitable. My wife had one, not probably anyway, so we put that in there. I got to click off it, and we can see instead of making, getting about a two thousand dollar refund, you're going to pay over $2,300, assuming again he didn't pay any federal taxes during the year, which most people would have that withheld from their check. So, what happened here? Well, for one, obviously they had $10,000 more income, so some of that would be taxed. A couple of other things that are happening though is scroll down here, they still get the thousand dollar child tax credit, so that doesn't impact their tax is higher because they do have more income. Another thing is when you're working for someone, you have payroll taxes, Social Security, Medicare directly taken out, so it's all settled. When you're self-employed, you have your own business, those aren't taken out, so you settle that in your tax return. Not only that, but you pay both the employee and employer side, so you pay 12.4% of that $10,000, essentially that is social security taxes, and then you pay 2.9% for Medicare taxes. So, that's where this additional fourteen hundred thirteen dollars of tax comes in. You do get half of that...