SS tax

Posted By: Patti on 2006-07-14
In Reply to: this is not exactly right - IC2

But remember if you open up a SPEP - 401K for self employed and contribute that 7.5% to it, it will lower what you will owe on your SS. Also remember you pay SS on the bottom line of your business, after all your deductions so take advantage of every and any deduction you can take. Also the 7.5% that you pay is deductable from your personal taxes so you pay less to that. All in all, the 7.5% does not bother me as I feel it is a small price to pay for the flexibilty of work schedule and being my own boss. But I pay way lessssssssssss taxes working for myself than I would working for anyone else and my take home is a good 40% higher working for myself.

Complete Discussion Below:

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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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