What are the taxes that self-employed people have to pay?

Self-employed people should be aware that they must pay all of their own Social Security & Medicare taxes (aka self-employment or SE taxes) on their business profits and New Mexico Gross Receipts Tax (GRT) on their business sales. Here's a comparison of the applicable taxes using hypothetical amounts.


INCOME TAXSELF-EMPLOYMENTGROSS RECEIPTS

FederalNMFederalNM
Reporting Form1040PIT-11040CRS-1
Total sales (aka gross receipts)$100,000

$100,000
Business expenses-75,000


Sales not subject to GRT (deductions)


-15,000





Net profit from business$25,000 $25,000 $25,000





Sales subject to GRT


$85,000





Tax rates (federal tax bracket)15.00%4.00%15.30%7.50%





Tax$1,734 $1,000 $3,825 $6,375