There is more to it than that
Posted By: Patti on 2006-03-06
In Reply to: IC vs employee - Tracy
When you figure your taxes you end up combing the SS and the personal together to pay, as an IC. So you can start out with the same base salary but as an IC you have deductions that you can take to lower what amount you pay 15% on for social security. Although the SS portion starts out higher as an IC, lots of time the personal income tax will be lower because you deduct half of the SS that is due. So you have to look at the TOTAL amount of tax that is due. You can lower your base as an IC by contributing to an SEB IRA or pension even the 7.5% that you would pay the SS and that lowers your base lowering your taxes all the way around. You cannot simply take 0.075 out of the 8 cpl that you are getting. A lot more goes into it even when just figuring taxes. That is my two cents worth.
Complete Discussion Below:  marks the location of current message within thread
The messages you are viewing
are archived/old.
To view latest messages and participate in discussions, select
the boards given in left menu
Other related messages found in our database
|
