Are you among the many Americans who switched to contractor work or started a side hustle last year? Now it's tax time, and you are unsure if you are doing things the right way. Although every situation is unique, it never hurts to review the basics to ensure you're approaching your self-employed taxes correctly.
Another new thing for contractors — self-employment tax! The self-employment tax rate is 15.3% of income, including 12.4% for Social Security and 2.9% for Medicare. As an employee, your employer would have covered a portion of these taxes, but as a self-employed person, you are on your own to cover those contributions and make sure that you're "paid in" when you need to access those programs later in life.
