Some places say 8% some say % others are right in the middle. Then you have some paperwork say another percent and you cut that in half. Does anyone know the TRUE percentage so that i can start figuring out how much i need to save to pay off SS & M.
2007-11-14 09:15:04 · 2 answers · asked by Joshua C 2 in Business & Finance ➔ Taxes ➔ United States
15.3% of 92.35% of your net income from Self-Employment
That works out to 14.12955%.
Trust me.....there is a method to the madness.......
2007-11-14 09:43:57 · answer #1 · answered by Wayne Z 7 · 5⤊ 0⤋
Wayne is right. It is called self-employment tax and it is 15.3% of 92.35%. The 1/2 refers to the deduction on your income tax (not your social security and medicare taxes) for 1/2 of that amount. Meaning that you pay (in addition to the social security and medicare taxes) income tax on the difference between the income and 7.65% of 92.35%.
2007-11-14 10:11:18 · answer #2 · answered by StephenWeinstein 7 · 1⤊ 0⤋