As a newly divorced, self-employed person with rental income in another state...

Soundmind
Soundmind Member Posts: 1 Newcomer
in Filing my taxes

Is it useful to set myself up for an LLC even though the self employment taxes are incredibly high? I'm currently working as a contractor but my boss said I can become an employee. Which would be more helpful in paying taxes?

· Share on Twitter

Answers

  • KennethH
    KennethH FreeTaxUSA Agent Posts: 16

    Hello,

    Thank you for contacting the FreeTaxUSA community board.

    The reason your self employment taxes are high is that you pay social security and medicare taxes for the employer and the employee (15.3% total). If you are an employee, you will pay 7.65% (deducted from your paycheck) and the employer will pay 7.65%. If you have the option of being an employee, it might be wise to take that option.

    Any other questions, let us know.

    · Share on Twitter

Categories