The Small Business Tax Help Blog

Posts Tagged ‘independencontractor’

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Question: Why is only half of a sole proprietor’s self-employment tax deductible in the computation of taxable income?

Answer: The self-employment tax is actually Social Security. Half is deductible because if the sole proprieter worked for a large company, the company would be allowed a deduction on half his Social Security. The rule is an effort to be fair to the little guy.

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Self Employment Tax Tips : Tax Tips for Home Business Owners