| Self employed people in the United States feel | | | | people who want to get into self employment in the |
| differently when it comes to having to shrug out hard | | | | United States. Countries like Spain and Italy have self |
| earned cash in the form of taxes. Self employed | | | | employment taxed designed in a way that will |
| individuals have to pay as much tax as an employer | | | | encourage their citizens to seek self employment and |
| and an employee combined – so much for helping | | | | in a way help ease the unemployment situation in the |
| the unemployment scenario in the country! | | | | country. |
| This is a give and take situation. The US government | | | | When you get into self employment you will be lucky |
| allows self employed individuals a lot of deductions on | | | | to earn a little over $100,000 in the first year. You will |
| their taxes. These taxes may be so high that people | | | | not have to pay the 12% Social Security tax on the |
| think twice before taking up any self employment | | | | amount that exceeds the 100,000 this is a saving but |
| opportunities. Entrepreneurs in the US claim that the | | | | you will have to pay the Medicare part of the tax. |
| government is indulging in the biggest fraud ever by | | | | Then when you are calculating the income tax part of |
| imposing huge taxes on self employed individuals and | | | | your taxes you can deduct a half of the taxes from |
| then giving them tax deductions. This amounts to them | | | | your self employment taxes –these are significant |
| having to pay a set amount of taxes anyway – so | | | | savings on the tax front. |
| why not do away with the deductions and lower the | | | | Claiming rent deductions for a home office is another |
| taxes charged in the first place? | | | | way of saving on taxes. Just calculate the annual |
| So far as Medicare and Social security taxes are | | | | rental for the home office and deduct it from your |
| concerned if your income crosses $400 you are liable | | | | income. This is considered as an expense – but |
| to pay more than 15% of your income as tax to the | | | | then the government will tax you on an income from |
| government. That is 15% over and above the usual | | | | your property, anyway it still saves you a few bucks in |
| income tax self employed individuals are expected to | | | | the long run. |
| shrug out. And then if you own your home you will find | | | | So if you do diligent research you will find that there |
| that you are paying the government more than half | | | | are many ways you can save on taxes you would |
| your total income in the form of taxes. | | | | normally pay as a self employed person. But then it all |
| Self employed people argue that this is a very unfair | | | | calls for additional effort and time – why not just do |
| level of taxation and is not encouraging at all for | | | | away with the deductions and lower the taxes? |