Self-Employment Tax Basics

Self-Employment Tax Basics
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Anne Johnson
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Working without a boss is the American dream. You can run the business however you see fit. Whether you’re a small business with employees or a freelance graphic artist, there’s a great sense of freedom and satisfaction.

But when tax time comes around, the dream can be shattered quickly. There are taxes you must pay that weren’t as harsh when you were an employee. What are these taxes? Is there any way to minimize them?

Self-Employment Contributions Act

The Self-Employment Contributions Act (SECA) tax refers to taxes owed by the self-employed. It is their version of the tax paid by employers and employees for Medicare and Social Security. It’s due on your net earnings for self-employment.
Anne Johnson
Anne Johnson
Author
Anne Johnson was a commercial property & casualty insurance agent for nine years. She was also licensed in health and life insurance. Anne went on to own an advertising agency where she worked with businesses. She has been writing about personal finance for ten years.
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