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Anne, Master Tax Preparer
Category: Finance
Satisfied Customers: 2439
Experience:  Enrolled Agent with 25 Years Experience specializing Individual and Small Businesses
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Is it good financially to go into business for myself?

Customer Question

Is it good financially to go into business for myself?
Submitted: 1 year ago.
Category: Finance
Expert:  Anne replied 1 year ago.


I'm Anne & I've been preparing taxes for 28 years. I'm reviewing your question now, and will post back with your reply momentarily.

Expert:  Anne replied 1 year ago.

There is always going to be a good/ bad scenario when it comes to working for yourself.

When you work for yourself, you must pay not only your own individual graduated tax as you have always done, you must also pay your own Social Security and Medicare tax. As an employee, you would pay 1/2 of Social Security/Medicare tax, and your employer would play the other half. When you're self employed, you must pay 100% of the SS and Medicare tax.

That being said, there are definitely some "perks"of being self employed. The first one is that you get to deduct most costs of doing business, thus lowering both your Individual income tax, and the Social Security and Medicare tax as these taxes are calculated using your "Net Business Income" Please see below: (you will need to copy & paste this web address)

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