Does the self-employment box on the Income tab assume that someone is giving themselves a paycheck that is taking out taxes for SS, Medicare, local, state, federal, etc on both the employee and employer side and paying quarterlies, or does it assume this is someone who is a sole prop that's just taking in 1099 income and squaring things up when they file their tax returns?
PRC never models quarterly payments or the reconciliation process that occurs in April. It assumes that the taxes due in a given year are paid in that same year. If the self-employment box is checked then PRC generates the appropriate self-employment taxes. Does that fully answer your question?
Yes I think I understand. So if it's a sole prop that's just taking draws and not paying into Fed, state, local, SS and Medicare as they would if they were cutting an official paycheck and doing quarterlies, PRC will just add those income numbers to their other income and calculate what the obligation should be, and that will be reflected in the taxes tab of the tabular summary. Whether they pay it or not is on them.
