Self Employment earnings

0

  • subject to the same income tax rates as wages and salaries
  • instead of being subject to normal social security and medicare payroll taxes self employment earnings are subject to the self-employment tax
    • employees of a company pay a social security tax of 6.2% and medicare tax of 1.4% which are withheld from each paycheck. The employer matches this so both the employer and employee pay 7.65% each (for a total of 15.3%)
    • for self employment you pay the entire 15.3%
  • business owners are responsible for keeping records of how much their business makes over the year
  • if you're an independent contractor, your income (if it's over $600) will be reported on Form 1099-MISC. If it's under $600 there's no report but you still have to pay taxes on it

  • 0 posts
  • 0 subtopics
  • 3 months ago by vince