More and more people in the United States, and honestly, around the world, are starting to become their own boss. But, when you’re self employed, there are some really important questions to be answered, the most important being about your taxes. How do you deal with taxes if you work for yourself? What are you supposed to do if you run a business or work Trucking Jobs for multiple people all over the country and take care of that on your own instead of working directly under a business? Being self employed in this regard can be a little difficult
First off, you are still required to pay taxes, but only if you make more than $400 in net income. But, your net income isn’t just what you make. Take the amount you made and multiply that by .9235 (or 92.35%). Why? It’s just the IRS/SSA standard for figuring out a self-employed person’s net income. If you don’t hit the $400 threshold, don’t worry about it. No need to pay taxes. But, if you make more than that, you need to get into the other fun stuff.
As someone who is self-employed or a personal contractor, you are required to file 4x a year: January, April, July, and November. At these times, you pay your Social Security, Medicare, and other applicable taxes. In April, you also file a normal return form. At this point, you will see if you get back some of the taxes that you paid in, just like everyone who actually works for a company.
Now, when you pay in those taxes, you need to pay 15.3% for Social Security and Medicare (unless your income is over $106,800). That happens at all 4 payments. When you fill out your 1040 in the spring, you will get back about half of this. Why? Because in a “normal” work environment, your employer would pay for half of that (7.65%). Since you don’t have an employer involved, that part isn’t included in your taxes.
Make sure that you also do the form SE (Self-employment- it’s a fact that the IRS uses obvious acronyms for things). This has some of the special implications that your taxes may have as well. If you don’t really feel comfortable doing any of this on your own, you will want to go to a tax professional. They are trained for this kind of stuff, and they can help you get the most for your money.
Self-employment is a great option in the United States today. You can work for yourself, make your own hours, and have more family and free time than you may in a normal work environment. It’s definitely not a career for everyone, but if you can make it work, the benefits and the taxes aren’t half bad. That can be a consideration that you want to make and, as time goes on, you definitely want to be sure that you explore the options and see what works for you.