Sound familiar?
Nobody tells you upfront that you have to pay self-employment tax on top of income tax. You price projects assuming a 22% tax rate, only to discover your effective rate is closer to 30-35% after self-employment tax kicks in. That 15.3% sneaks up on you and crushes your profit margin.
Nobody tells you that you have to pay self-employment tax too. I thought I just owed income tax. This is brutal
New freelancer, via Twitter/X
Self-employment tax is 15.3% on top of income tax, covering both employer and employee portions of FICA
Freelancers who price projects assuming a 22% tax rate often discover their effective rate is closer to 30-35% after self-employment tax
Source: SelfEmployed.com
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