Self-Employed Itemized Deduction Total Tax Savings

I'm trying to understand how much total tax savings a single itemized deduction would yield. Most of what I have read suggests that your savings would be equivalent to your specific federal tax bracket (assuming any deductions wouldn't drop you into a lower tax bracket). For instance, a 1k deduction on a 100k income at a 28% tax rate would save $280.

However, this only concerns the payment of federal taxes. Wouldn't there be savings with respect to state taxes and the self-employment tax as well? Using the previous example, since my state tax bracket is 6.65% and the self-employment tax is 15.3%, both of which are based off of my taxable income, wouldn't I save an additional $219.5 for a grand total of $499.5? I feel like I'm missing something critical here.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s