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I made $28,000 do I really owe $5,000 in taxes?

Asked by: jmlcpl 3064 views YA Discussion

I have a store on amazon.com and sell used items, I made $ 28,000 in profit after all of the deductions and fees and H&R Block says I owe $ 5,000 in taxes, can this be right? I am single and don’t have any kids.

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  • if i made 28000 what is my tax return

4 Answers

  1. Libraryanna on Apr 15, 2012 Reply

    We can’t say because we don’t have all the details. The problem with self-employment is that you have to pay all the taxes normally paid by employers or taken out of your check, like Social Security, Medicare, etc. That is just an 18% tax rate, so it isn’t horrible.

    If you have doubts, use TurboTax, which is free so long as you don’t submit your return through them. Do a comparison.

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  2. Herrmann on Apr 15, 2012 Reply

    Yes, this is right. Most people don’t even think about how much they are “contributing” to the Social Security system because it is taken out weekly and is not really part of the income tax return. (it is, but it isn’t).

    So, when a self employed person finds out he not only has to pay the employee’s share but the employer’s share as well, he flips.

    Sorry, but that’s the price of working for yourself.

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  3. Max Hoopla on Apr 15, 2012 Reply

    That much profit will generate $ 3,465 in self employment tax, Social Security and Medicare tax on self employed persons. You can’t get around it. When you add income tax to it, $ 5,000 is about right.

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  4. Ali M on Apr 15, 2012 Reply

    Here is how your tax is calculated;

    Business Income $ 28000
    Total Income $ 28000

    SE Adjustment -$ 1978

    AGI (Adjusted Gross Income) $ 26022

    Standard Deduction -$ 5800
    Personal Exemption -$ 3700

    Taxable Income $ 16522

    Income Tax $ 2053
    Self Employment Tax $ 3439

    Total Tax $ 5492 <——–This is how much you will need to pay the IRS. Good luck!

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