Even as your enthusiasm about finally making some money in your home based business is beginning to build, in the back of your mind the nagging worry about the tax ramifications that your sudden income will generate cannot be denied. Sure, you probably read up on tax liabilities, but more than likely with an eye to tax deductions rather than self-employment tax.
Self-employment tax rules for the fiscally challenged are by no means all-inclusive, but they do provide a good rule of thumb that helps you understand how much of a hit you can expect Uncle Sam to take. When you are in business for yourself this is very important information to have and understand.
Many a myth has sprung up around self-employment taxes, but in essence they are little more than your paying into the social security and also Medicare funds. In the past, you saw these deductions on your paychecks.
At this point in time, your self-employment tax rate regardless of income below $94,200 is set at 15.3%.
A much-overlooked rule dictates that you are supposed to pay your estimated self-employment tax throughout the year. This is true especially when you find at the end of the last...
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