Jump to content

Self employed taxing, how does it work?

Recommended Posts

I am somewhat self employed, and I hear that those who do this kind of work, will have to pay nearly double in taxes. I know that they charge you a percentage for being self employed on top of the income tax. 

I believe it stems from not being tied to an actual business, so you're technically your own boss and therefore are responsible for employer taxes as well. 

So yeah, what is the % self employed need to pay?

Link to comment
Share on other sites

Self employment tax in the United States at the federal level is 15.3% which is broken into two parts. 12.4% is going to social security and 2.9% for Medicare. The IRS has a great break down of how this all works here: https://www.irs.gov/businesses/small-businesses-self-employed/self-employment-tax-social-security-and-medicare-taxes

It is important once you start making decent income on your own to start making quarterly tax payments so you do not get hit with a huge year end bill you were not expecting. If you can afford it onboarding a CPA to work with you will make sure you maximize your deductions and take advantage of every opportunity you can in the tax system. 

Link to comment
Share on other sites

I think you have to also consider the state you live in. Every state charges a different percentage according to your earnings. You can Google this and a site should pop up that has you put in the state/location and your yearly salary. This will fluctuate from year to year if you are self-employed as well. 

  • Like 1
Link to comment
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.


  • Create New...