Self-Employment Tax Explained: The 15.3% Nobody Warns You About
Somewhere around your first year of 1099 income, you’ll hit a number on your tax return that W-2 employees never see: self-employment tax. It’s not a penalty and it’s not a mistake – it’s the cost of not having an employer, and it catches new freelancers off guard almost every time because nothing about a regular paycheck prepares you for it. Here’s exactly how the 15.3% is calculated, why it’s not quite 15.3% of what you think, and what it looks like on real numbers.
Read More