Why do freelancers/contractors pay more in taxes (USA)
When you work a regular job, you'll notice that certain taxes come out of your paycheck (state, medicare, SS). What you don't see, is that your employer pays half of some of those taxes and you pay the other half. Now, when you're a freelancer or independent contractor, you are your own employer,…
The Short Answer
When you work a regular job, you'll notice that certain taxes come out of your paycheck (state, medicare, SS). What you don't see, is that your employer pays half of some of those taxes and you pay the other half. Now, when you're a freelancer or independent contractor, you are your own employer, so you pay both halves of the tax. This is colloquially referred to as the self employment tax. Further, if you run your own business as a freelancer, you also have to pay taxes as a business, but that is more complicated and maybe not what you were asking.
Analysis
Key Concepts: Taxes, employer, half
This explanation focuses on taxes, employer, half and spans 102 words across 5 sentences. At 42% above the average Society explanation (72 words), this is one of the more thorough answers in this category, reflecting the complexity of the underlying question.
What This Answer Covers
The explanation opens with: “When you work a regular job, you'll notice that certain taxes come out of your paycheck (state, medicare, SS).” It then elaborates by presenting a contrasting perspective, ultimately building toward a complete picture across 5 connected points.
How This Compares in Society
Ranked #126 of 500 Society questions by answer depth (top 26%). This falls in the detailed tier — above average depth. The explanation goes beyond surface-level but keeps things accessible.
Frequently Asked Questions
Is there a simple explanation for why freelancers/contractors pay more in taxes (usa)?
When you work a regular job, you'll notice that certain taxes come out of your paycheck (state, medicare, SS). What you don't see, is that your employer pays half of some of those taxes and you pay the other half. Now, when you're a freelancer or…
How detailed is this explanation compared to similar Society questions?
This is an above-average answer at 102 words, ranked #126 of 500 Society questions by depth. The key concepts covered are taxes, employer, half.
What approach does this answer take to explain freelancers/contractors pay more in taxes (usa)?
The explanation uses contrasting perspectives across 102 words. It is categorized under Society and addresses the question through 1 analytical lens.