Q&A: Hello. Is there any way to reduce the self employment tax as an independent contractor?
Hi,my name is Anne,I did the following:
Q&A: Hello. Is there any way to reduce the self employment tax as an independent contractor?
I will make 10000 in 2008 and am wondering if there is any way to reduce the self employment tax so I don’t have to pay the ,000 or whatever it may be.
The answer in the following:
Answer by Helen, EA in PA
You can use your qualified expenses to reduce the gross income.
Helen, EA in PA
Answer by bostonianinmo
Keep careful records of your business expenses. That’s the only thing that will reduce the SE tax. Due to the way that it’s calculated, the net rate is about 14.1% of the net profit.
Answer by wartz
The tax is 15.3% of 92.35% of your “profit” That’s roughly 14% of what you have before jumping through the hoops.
Are you really, I mean really really an independent contractor with lots of control over how you work or are you an employee who is being cheated by his employer. If you have to jump when the employer says jump, you should contact your state labor commissioner and request an investigation.
Answer by jayteaou812
Basically the tax rate for self-employed independent contractors is 15.3%. The tax rate itself cannot be changed however there are certain things that can be done to adjust the effective tax rate you pay. There’s some good information at the IRS website (see the link below)
What do you think? Answer below!
