15.3% tax on sole prop?

[justmjc]

Anyone know if there is a 15.3% self employment tax on sole prop. companies? Or does that fall into LLC and C/S corp. companies?

[MacLawnCo]

15.3 is the combined portions of both the social security tax and medicare tax, of which employees pay half (7.65%) and the employers pay the other half. In the case of a self employeed person, they are required to pay both portions...but you can deduct half the 15.3% (7.65%) at years end on your taxes.

[tiedeman]

gotta love the tax on solo prop. (yeah right)

[mtdman]

If I knew Social Security was going to be there when I retire, I wouldn't mind so much paying that tax. But there is no gaurantee it'll be around in 30 years, and I'd much rather put that 15.3% into my own retirement account.

[Team Gopher]

Hi Justmjc,

Here is a quote from this site (http://www.webhostingtalk.com/archive/thread/34572-1.html).

"You have to pay regular Federal Income Tax and State Tax on what you made (state tax depending on where you live). Also you pay Self-Employment Tax. This is the biggie tax so to speak that you pay. It is 15.3% of business' net income. You do however get to deduct half of that the other adjustments sectino of the tax return."