About half of that is self employment tax, for social security and medicare. She didn't have than deducted from her paychecks, and doesn't have an ';employer'; who is required to pay the matching funds, so she has to pay both halves now.
Also, if you entered your income first, all of the exemptions and deductions got applied to yours rather than split, so when you entered hers, all of it was taxable at a rate starting where yours left off. It's not really that SHE owes the amount, but that you owe it together when your incomes are added together.
Sorry, but it's probably right. Didn't you figure that since she didn't have any taxes taken out through the year, it would catch up sometime?HELP PLEASE! Wife is hair stylist made $13,724.25 that was 1099-MISC, now turbo tax says she owes 4K! What now
If she has 1099-MISC income she should have been filing form 1040-ES quarterly (or you should have adjusted your W-4 to cover it) so the tax would not hit you all at once. The income she makes would be taxed at your marginal rate (15%?), plus the taxes on Schedule SE. $4000 sounds about right.
Yes, your income is also subject to 15.4% SE tax. However you can deduct your business related expenses. You income is reported on schedule C (Form 1040).
How you will treat the 1099-Misc income, read: http://taxipay.blogspot.com/2008/03/w2-o鈥?/a>
Go to H%26amp;R Block. They can help you.
If she made $13,724.25 with no deductions, than you have a $2,100 self-employment tax bill on top of your income taxes. If you are in the 15% tax bracket the income tax would be $2,059 - TOTAL TAX = $4,158. An honest tax preparer can not lower that tax bill.
The only way to lower your tax bill is to make sure you deduct any legitimate expenses she had - shampoo, towels, scissors, hair dryers etc...
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