SS

I do very well just doing the Schedule C without incorporating.  After all my deductions, mileage, ofifice, 401K, insurance, etc.I am able to deduct about 25 to 35K and what I pay SS on is less than what I would pay myself a salary.  So to me ir equals out the same as if I were to pay myself 20K in salary.  Just works for me.  Either way, after all deductions, I take what is left over as salary and pay income tax and SS tax on it. 

Also on 1040 there is a place that you credit one-half of what your ss tax was.  Say your net income from business is 10,000 so ss would be 750, you get to credit on page 1 of 1040 ($375) from your salary which then goes over to side 2 and you figure your Federal income tax on that balance.  You are basically paying two taxes -- social security and federal income tax.  Look at you old tax returns and you will see. 

• Advice needed - Switching from employee to IC - MTMOM
  • Thanks! - MTMOM
  • Uh, please... - LORDEE!
    • Ummm, some MT's run their own businesses... - sm
  • IC status - Patti
  • To answer C-phone question - MT2
  • advice - mhmt
    • this is not exactly right - IC2
      • SS tax - Patti
        • Poor you, Patty. I can't imagine living off 20K a year! - LORDEE!
          • 20K is my taxable income - Patti
          • sm - none
            • I second that motion! - mac
        • I understand this except where you say - ER MT
        • better yet is when you incorporate - IC
          • SS - Patti

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