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But you can afford self employment taxes? - sm

Posted: Jul 14th, 2019 - 7:10 pm In Reply to: That’s a lot of money lost - MT

An independent contractor must pay the higher self-employment tax. ... An employee may be able to obtain better benefits than an independent contractor. Employer subsidized health, life, disability and retirement benefits represent part of the “hidden paycheck” for employees that independent contractors don't always enjoy.

It's often recommended that you set aside 25 percent to 30 percent of your income. Yes, that sounds like a lot. Here's the thing: You're not just paying income tax. You must also pay self-employment tax, and your budget must cover both.

You may see it as a pay cut, but you're actually paying higher taxes. The more money you make, the more they take especially being self-employed.

I'll take the VBC and not have the headaches. I'll also take being able to say I am employed, not that I contract work so may or may not have some when I'm trying to get credit or make a major purchase.

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