I have a tax question ...sm

The taxes/financial link takes me to the States board (?) so I hope I can post this here.

I'm considering going from FT employee status back to IC, but it's been years since I was IC and don't remember for sure what the tax rule is... and my accountant at the time didn't know something about paying estimated tax and I ended up with a penalty for not doing so... long story and won't go there... fired him!

Anyway, my question is... What amount do you pay your self-employment tax on?  For example: If an IC works for say two or three companies in a year and makes $30,000, and has $10,000 in business deductions like internet, phone, paper, postage, etc., do you pay your self-employment tax on the $30,000 gross or the $20,000 net? 

I'm trying to look at the pros and cons of giving up employee status and trying to figure out how it would pencil out paying the whole SE tax myself, private insurance, etc.  Whether the SE tax is paid on net income after deductions or gross income could be quite a chunk of change... and could change my mind about going IC.

Any info is appreciated... I am going to call my accountant tomorrow, but thought I'd ask here tonight and see if anyone knew.  Thanks!

• I have a tax question ...sm - Thinking of going IC
  • Thanks for the responses... I knew I came to the right place...sm - Thinking of going IC
  • taxed on net income - Patti
  • Make sure there aren't other taxes that you're overlooking. - sm
    • Some *states*. YIKES! - nm
  • Tax guy fee is deduction as is insurance cost if - you pay it. Tax guy should tell of many deduct.

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