deductions pre or post SET

[jacob1733]

I am not sure how this works. I am self employed and I wanted to know if you are able to write off anything before you pay self employment tax. For instance, if I were to make 10,000 as a self employed worker, do I pay $1,530.00 in SET?? Or can I deduct off the top (charitable giving, mileage, sales tax, mortgage interest, etc.), and knock it down and pay on a smaller amount?? Are there any deductions that are pre SET, or are they all post SET??

Thanks,

Jacob TN

 

[LdiJ]

I am not sure how this works. I am self employed and I wanted to know if you are able to write off anything before you pay self employment tax. For instance, if I were to make 10,000 as a self employed worker, do I pay $1,530.00 in SET?? Or can I deduct off the top (charitable giving, mileage, sales tax, mortgage interest, etc.), and knock it down and pay on a smaller amount?? Are there any deductions that are pre SET, or are they all post SET??

Thanks,

Jacob TN

If you are self employed, and are filing a schedule C, then you are deducting all of your business expenses before calculating your self employment tax. That could include mileage (business miles) but would not include any of the other deductions you mentioned, because they are all schedule A, personal, deductions.

 

[FlyingRon]

I am not sure how this works. I am self employed and I wanted to know if you are able to write off anything before you pay self employment tax. For instance, if I were to make 10,000 as a self employed worker, do I pay $1,530.00 in SET?? Or can I deduct off the top (charitable giving, mileage, sales tax, mortgage interest, etc.), and knock it down and pay on a smaller amount?? Are there any deductions that are pre SET, or are they all post SET??

Thanks,

Jacob TN

Things that come off the top on the Schedule C decrease what your actual self-employment earnings are. This reduces the SET you owe.
These are things like mileage and other expenses of the business itsef.

Things that come off on schedule A get deducted after SET is computed: charitable gifts, your home mortgage , etcc.

Start here for info
http://www.irs.gov/businesses/small/article/0,,id=98846,00.html