Article Date:
July 2022

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Self-Employment: Quick and Dirty Guide to Tax Issues and Savings

Are you considering joining the Great Resignation and becoming self-employed to be in charge of yourself?




Okay, but before leaping, consider the tax implications. This self-employment thing may not be as rosy as it appears.


Here’s the big picture.


Don’t Believe the Hype


Despite what some may believe, becoming self-employed won’t allow you to



write off all your meals as a business expense,


deduct the cost of taking your friends to sporting events,


deduct all your transportation expenses, and


write off the entire cost of owning or renting a residence that contains your home office.


Sorry about that.


While there are some tax advantages to being self-employed, they are underwhelming and should not be the main reason for deciding to go out on your own. We cover tax benefits later in this analysis.


The big non-tax disadvantage is you’ll have to pay for things that were formerly provided by your employer, such as



health insurance,


retirement plan contributions,


a company car (if you were lucky),


company-paid business trips that included elements of pleasure,


meals when you worked late at the office, and


so forth.


And there is one big tax disadvantage: the dreaded self-employment tax.


Now, some details on the tax issues most likely to affect you as a self-employed taxpayer.


The Dreaded Self-Employment Tax Can Be Really Expensive


The self-employment tax is how our beloved U.S. Treasury collects Social Security and Medicare taxes on non-wage income from business-related activities. ... Log in to view full article.

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