Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
An employee making $20,000 a year after taxes either.
We did okay on that last year.
Quote:
Originally Posted by Malloric
Nonstory. Everyone hates paying taxes. Welcome to the club. You may not be a liberal welfare clown, but you sure stick you hat out like you expect something sweet welfare honey from them.
Not true. A better analogy would be that I would be showing 'em the hand, or the gun if you want to use that, and saying "I don't need nor want what you have but keep your grubby hands off what I have".
Because the pay reflects all the perqs you're not getting. For example, typical hourly rate for an employee in my field is $30-40/hr. In the freelance word, there's not health insurance, retirement, both sides of the FICA taxes, and so on, have expenses the employer would normally cover. That's why the freelance rate is more like $50-75/hour. Works out about the same.
Self employment tax is just the tax a self employed person pays instead of FICA. You figure the tax on form SE and then deduct half of it on the 1040 - so a self employed person does not pay both sides of the FICA equivalent.
You have more flexibility as a independent contractor. If you travel a lot, you have the flexibility to accept part of your performance fee in the form of a per diem to cover travel and lodging expenses while you're away from home These are exempt from both federal and payroll taxes.
You pay both the employer and employee shares of the FICA tax on reported earned income. Social Security and the Medicare/Medicaid taxes are just rolled into one SE tax. The tax rate is 15.3%.
I made a mistake - you figure the self employment tax and deduct one half of it on the same form - schedule SE. This is what you pay instead of your half of FICA. It then gets reported on the 1040.
Self employment tax is just the tax a self employed person pays instead of FICA. You figure the tax on form SE and then deduct half of it on the 1040 - so a self employed person does not pay both sides of the FICA equivalent.
Yes they do.
Business deduct the half of FICA taxes they pay as well and don't pay income tax on it either. Who else is paying for the other half of the FICA taxes if you're self-employed?
I understand this. However, there's no getting around the fact that two people living on $20,000 per year (after deductions) can't afford to pay $3,000 in federal tax. That's why I'm trying to see if there is any sort of "tax forgiveness" or "tax reduction" that I am not yet aware of, which can reduce this hit for people who can't afford it.
Sounds to me like you are in that really nasty middle ground where you make enough that the government thinks you can pay for your living cost and some taxes, but not enough that you really can...
One of you will need an outside job, at least part-time.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
