Is self-employed tax the same as????????

[Gpan]

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I have goggled and searched everywhere but still unclear on this.
Is self-employed tax (social security tax+ medicare tax) THE SAME as State tax ?

FOr example, if an independent contractor who gets paid with 1099 form in CALIFORNIA, does he/she have to pay all 3 of these :
1-Federal tax of course
2 CA state tax
3- Self Employed tax????

much appreciated

 

[southerndoc]

Yes, you must pay all 3. Self-employed tax is NOT the same as state tax. If you are employed, then half of this is paid by the employer and the other half is paid by you. Independent contractors are their own "employers" which means they must pay both portions.

Self-employment tax is 15.3% of everything up to $118,500 and 2.9% for everything above that. You must pay your federal taxes at the marginal rate. If high enough, you will be paying 39.6% for the upper most portions of your income (you can Google the 2015 tax brackets based on single, married filing jointly, etc.). Not sure what the California tax is, but you must pay state taxes. Some localities (like NYC) have local taxes as well. My county has an occupation tax for physicians ($400/year flat fee).

Welcome to the world of taxation. Don't forget, you must estimate your tax liability for the year and pay quarterly estimated payments to the IRS and your state. Failure to do so will result in penalties (usually just interest for the IRS, but may be a misdemeanor by state law).

 

[Gpan]

Damn, I was hoping for it not to be true LOL..... 🙁