Do I need to pay self-employment tax on personal investments?
August 2nd, 2008 | by admin |illuminate asked:
I’m self employed, but aside from my business income, I have personal investments, which have produced gains of about $20K in 2007. Do I need to pay SE tax on that or just my business income? Thanks for your help.
I’m self employed, but aside from my business income, I have personal investments, which have produced gains of about $20K in 2007. Do I need to pay SE tax on that or just my business income? Thanks for your help.
3 Responses to “Do I need to pay self-employment tax on personal investments?”
By carolyn43 on Aug 3, 2008 | Reply
You need to ask a accountant
By Judy on Aug 4, 2008 | Reply
No, the SE tax only applies to your business income, on your schedule C. It doesn’t apply to your investment income on schedule D
By Mathew on Aug 7, 2008 | Reply
Your Business Income is reported on Schedule C and the net is subject to SE Tax. The investments are reported on Schedule D or B or directly on the 1040 in the case of interest or dividends. You may want to seek the help of a professional tax preparer. Given the level understanding that you seem to have they may just save you more than they will charge you. Normally Schedule C offers a number of deductions for expenses that you may not be aware of.