In Georgia, if you are self-employed and your net income is under $5,000, you will have to pay both federal self-employment taxes and possibly state income taxes, depending on your total tax situation.
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Self-Employment Tax: For 2023, the self-employment tax rate is 15.3% on your net earnings, which includes 12.4% for Social Security and 2.9% for Medicare. However, only 92.35% of your net earnings are subject to self-employment tax.
For an income of $5,000, the calculation would be:
- Net earnings: $5,000 × 92.35% = $4,617.50
- Self-employment tax: $4,617.50 × 15.3% = approximately $707.88
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State Income Tax: Georgia has a state income tax that ranges from 1% to 5.75%. For a net income of less than $5,000, you can expect to be in the lower brackets. If your taxable income after deductions is under $5,000, you would likely owe a minimal amount in state income tax, possibly in the range of $0 to $50, depending on any deductions or credits you may have.
Overall, if your net income is just under $5,000, you might expect to owe about $700-$800 in total taxes, but the exact amount could vary based on your specific deductions, credits, and any other income sources. It would be a good idea to consult with a tax professional or use tax software for a more precise calculation tailored to your situation.
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