Ask TaxMama.Com Tax Information With A Mother's Touch Published by Eva Rosenberg, MBA, EA Volume 3      Issue 103       March 9, 2001

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HsssssssssSocial Security From: Arlington, Virginia Dear TaxMama, When you start a business (sole proprietor), how do you file your Social Security tax? Raul Dear Raul, This is a confusing issue for lots of new business-owners. That's why I always suggest that folks starting new businesses meet with a tax pro for a couple of hours first. You see, there's more to your question than simply filing for Social Security - you also have to report your business income or loss. Start with Schedule C, Profit or Loss from Business Then, take the amount on line 31 and carry it to Schedule SE - Self-Employment Tax. You will pay both the employer's and employee's share of the Social Security tax (15.3%). Normally, as an employee, they deduct only half (7.65%) from your paycheck. (Which usually hurts, doesn't it?) Your employers pay the matching 7.65% from their own coffers. When YOU are the boss, that's now your obligation. Ouch, huh? You'll find some more tips to get you started here: “Starting A Business” From Issue 97 of AskTaxMama. And if you'd really like to do it all right - there's more to taking care of your business than handling Social Security. Pick up a copy of Jan Zobel's book, Minding Her Own Business: The Self-Employed Woman's Guide to Taxes and Recordkeeping. (Just because the title refers to women does mean a Raul can't use it just as well.) Best wishes, Eva Rosenberg

Library of Congress -  ISSN 1532-0790 Copyright © 2000-2003 - Eva Rosenberg

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