General Forums >> Creative Work Options >> Why do contractors pay such high taxes?
Why do contractors pay such high taxes?
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Posted 7 months ago While I have a full-time job, I also filed a 1099 tax return for freelance consulting and contracting I do on the side. I was amazed to compare how much more I paid in taxes (percentage-wise) on my 1099 wages than on my W-2 pay! Does this strike anyone else as strange? Wouldn't you think that freelance pay would be taxed either equally or less than full-time wages, considering the fact that freelance pay doesn't include all the benefits (like insurance, 401K, etc.) that full-time work gives you? |
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| Posted 7 months ago you will be able to expense so much out though - remember that. When I first started as a contractor my exemptions were 9 just to break even, and then expense everything out - yes! Also there are GREAT umbrella companies for contractors so you do not have to 1099, but still get all the benefits or 1099 COMBINED with being a w-2! Ann M. Evanston, MA CEO Zena Enterprises
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| Posted 7 months ago You're right that some exemptions really help out - but I didn't find many this year. To be fair, I might have found more had I gone with a professional accountant, which I will definitely do next year. |
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| Posted 7 months ago My goal is to always break even, and as I make more in my buisness it gets harder, but I think that is true even if you are employed. Charity is key in both situations. Ann M. Evanston, MA CEO Zena Enterprises
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