Net Profits
You only pay taxes on what you make. You'll take a look at what's left after all your deductions & expenses.
15.3% Self Employment Taxes
The first tax you'll owe are called "self employment taxes", which comprise of social security & medicare tax - only up to the social security limit of about $150,000.
12.4% Social Security Taxes
All income up to the social security limit of about $150,000, is first subject to the 12.4% social security limit, which is what funds social security benefits and determines your benefits when you retire.
2.9% Medicare Taxes
You'll then owe 2.9% medicare tax on all income even above the SS limit. The medicare tax increases at certain thresholds.
State and Federal Income Taxes
After paying your state and federal income taxes, it "passes through" to your 1040 personal return, where you'll pay federal & state income tax.
