Self employment rate for SS/Medicare = 2 X employee rate. Using the
2008 number of 15.3, employee rate would be 15.3/2 = 7.65% - making my
single digit % comment valid. http://blog.accountingcoach.com/social-security-tax/
Not every full time employee has a 401k match from their employer,
and not every employee uses 401k even if it is available (IRAs are
available to the self-employed as well, correct?), but your point
about health insurance is very true.
On Jul 30, 2008, at 1:13 PM, sbeam wrote:
On Wednesday 30 July 2008 12:37, Mike Dikan wrote:
This is true, but as someone else mentioned, factor in deductions,
and
the fact that SS/Medicare are a relatively small part of taxes when
put up against the 800-pound gorilla of income taxes, and the tax
rates are roughly similar. It maybe be a few more % (single digit)
as
a freelancer, but they are pretty similar for comparison.
Incorrect, it's 15.3% on the first $94K
http://www.irs.gov/businesses/small/article/0,,id=98846,00.html
Also, just because something is deductable does not make it free.
Also your
two biggest costs, Retirement and Health Insurance, which are
subsidized by
the tax code for salaried employees, are NOT deductable and come
straight out
of pocket.
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