Taxes - workathome Posted: Aug 21st, 2018 - 4:15 pm In Reply to: Taxes for self-employed - Curious
The thing to keep in mind when you are self employed and paying taxes you must pay the full FICA (self employment taxes) and it is 15% of your net earnings/profit (after you have subtracted your expenses - not deductions but your business expenses). It usually a big chunk for most self employed because you are no longer having your employer pay your half (you pay half and your employer pays half).
I agree with the poster that said to have 2 accounts so you can set aside 25% to 30% of your income so it easier tax time. I have found doing this automatically has been a life saver for me. That first year being an IC I almost had a heart attack when I realized what my FICA was in addition to federal and state taxes. The deductions were not enough to really offset because they were not that high compared to most small businesses.
I think the on line tax programs are very good Turbo Tax and Tax Act. They break it down and it helps to me to understand how taxes work. They ask every question on the form to help you get all your fair deductions.
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- Taxes for self-employed - Curious (Views: 709, 2018-08-21, 10:42 am)
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- Taxes - workathome
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