It's called the Self-Employment Tax. It is twice the W-2 Social Security tax. Half the Social Security tax is paid by the employee and half is paid by his employer. Because 1099 contractors are their own employers, they pay both parts.
It's reported on the 1040 Schedule C business income form, with half of the Self-Employment tax being deductible on the 1040.
Yeah, it can be a bitch being a consultant because there are all kinds of legal protections that W-2 employees have that I don't have.
I have never been discriminated against by a client as a result of my disability. What is a huge problem though is that dishonest clients are always trying to rip me off. Often my checks are late if I get them at all.
W-2 employees have all manner of legal protections against employers who fail to pay, but the best I could hope to do is to sue deadbeat clients. I've considered this at times, but I've been advised by attorneys that unless I have a contract that says otherwise, I'd have to sue in my client's venue. Sometimes just the travel cost to show up at a courthouse thousands of miles away is more than it's worth.
Mike Crawford for Clark County Commissioner
District 1 North County
Paid for by The Communard Party of Washington State
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