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Posted by Carolyn Bodley on 2/22/21 7:05am
Janet, I used a CPA for probably the first 17 years of my biz before doing them myself. What they always told me an what IRS.gov also says is “It should be noted that anytime self-employment tax is mentioned, it only refers to Social Security and Medicare taxes and does not include any other taxes that self-employed individuals may be required to file. Schedule SE is the form used when filing yearly taxes. SE tax rate is 15.3% and consists of 2 parts — 12.4% for Social Security and 2.9% for Medicare Hospital insurance.” Social Security used to send out an earnings report yearly, but now you have to go online and see it. You can see how much you’ve earned and how much has been paid in since you first started working. I know when I compare mine, my SE payments are included in the yearly report.
I agree wholeheartedly that people need to get help from a financial advisor instead of slip-sliding along and holding their breath or crossing their fingers every year when tax season rolls around.
As an employee of someone else, this is what appeared as FICA on paystubs — employer paid half and individual paid half. This is probably why you get to deduct 1/2 on income taxes when you are self-employed.
Quite honestly, I don’t understand how “other” taxes over and above biz write offs, as a self-employed individual are addressed. |
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