💼Self-employment tax is a significant tax that most people can reduce.
💰Small business owners pay twice as much self-employment tax as employees.
📝Maximizing tax deductions is key to reducing self-employment tax.
🤝Changing your business entity can help avoid self-employment tax.
🏢S Corporations do not pay self-employment tax, making them a favorable entity for small business owners.
Do I have to pay self-employment tax?
—If you earn any amount of money that is not taxed before it hits your bank account, there is a 99% chance that you have to pay self-employment tax.
What can I do to reduce my self-employment tax?
—You can maximize tax deductions and consider changing your business entity to reduce your self-employment tax.
How much self-employment tax do small business owners pay?
—Small business owners pay twice as much self-employment tax as employees on the same amount of income.
Can I deduct self-employment tax?
—No, self-employment tax itself cannot be deducted. However, maximizing tax deductions can reduce the overall taxable income.
What is the advantage of an S Corporation?
—S Corporations do not pay self-employment tax and offer potential tax savings for small business owners.
00:00Most people are concerned about how much money they will owe or get back as a tax refund, but they often overlook the various types of taxes they are paying.
02:15Self-employment tax is a significant tax that most people can reduce. Small business owners pay twice as much self-employment tax as employees on the same income.
08:24Maximizing tax deductions and changing your business entity are two primary strategies to reduce self-employment tax.
09:53S Corporations do not pay self-employment tax, making them a favorable option for small business owners.
