15.3% tax on sole prop?

Discussion in 'Business Operations' started by justmjc, Feb 19, 2004.

  1. justmjc

    justmjc LawnSite Senior Member
    Posts: 261

    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?
     
  2. MacLawnCo

    MacLawnCo LawnSite Bronze Member
    Posts: 1,847

    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.
     
  3. tiedeman

    tiedeman LawnSite Fanatic
    from earth
    Posts: 8,745

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

    mtdman LawnSite Gold Member
    Posts: 3,137

    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.
     
  5. Team Gopher

    Team Gopher LawnSite Platinum Member
    from -
    Posts: 4,041

    Hi Justmjc,

    Here is a quote from this site.

    "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."
     

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