(What is the Self Employed Tax?)
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http://www.wcgem.comWhat is the Self Employed Tax?
self employed tax

Are you wondering what the self employed tax is? If you are thinking about going to work for yourself and you are doing research about what taxes you will have to pay when you become self employed you probably saw the self employment tax. The self employment tax is about half of the payroll taxes that you would pay if you worked for someone else. So when money is taken out of your paycheck each time you get paid when you work for a company that money goes to pay Social Security and Medicare taxes.

The self employed tax is money that you need to pay to Social Security and Medicare from your own earnings if you are self employed because even if you are self employed you need to pay into Social Security and Medicare because everyone who works pays into Social Security and Medicare. The self employed tax is about 15% so you pay about half of what you would pay if you were working for someone else when you pay the self employment tax. If you are going to be quitting your job and you are going to work for yourself financial planning experts suggest that you open a separate savings account and that you put the same amount of money that you would have had taken out of a paycheck that you got from an employer for taxes and you put that amount of money in the savings account every time you get paid when you are self employed.

That way when tax time rolls around you will already have all the money saved that you will need to pay your taxes. If you don’t save money in advance you might end up owing hundreds or even thousands of dollars in taxes and you might not be able to come up with a large chunk of money like that to pay your self employed tax and other taxes. So if you can open a new savings account and save money here and there during the year you’ll be in a far better financial position when tax time rolls around. If you thought that you wouldn’t have to pay taxes because you were self employed unfortunately you do still have to pay taxes.

The self employed tax is just one of the taxes that you will have to pay. If you are worried about how to file your self employed taxes you should consider having a professional do your taxes at least for the first year that you are self employed because your first year’s self employed taxes are probably doing to be the trickiest. Once you understand the self employed tax and other ins and outs of self employment finances you can probably do your own taxes but at first it’s a good idea to let someone who knows more about self employment taxes file them for you. It might end up saving you a lot of money and during the first year of being self employed is when you’ll need your extra money the most.

Learn from the mistakes of others. You can never live long enough to make them all yourself.

Walt Gemmell
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