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Originally Posted by aloft  As a contractor, you pay your share of Social Security--7.65%--AND what's normally the employer's share--also 7.65%--as "self-employment tax", for a total of 15.3%. Plus Medicare and your normal income tax. |
You're right...
Taking it further - you have more control over your tax situation. If you can forecast, accurately, what you're going to make that year, and you know what you're going to be deducting as expenses, you have a little more control over your tax-destiny. As a contractor, there are many, many, many things you can deduct that an ordinary employee cannot.
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Does it come straight out like a regular job, or do you have to save it up for when tax time comes around?
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I believe - and I might be wrong about this - that you
can file and pay quarterly as an independent contractor, but you don't have to - annual works. You just fill out your 1040, do your Schedule A for deductions, crunch the numbers and send the IRS a check, or don't send them anything if you calculate to less than a dollar owed, which should be the goal.
If you're a certain type of business, you have to file quarterly. Need to ask a tax pro, though - been a long time since I did contract work and I honestly don't remember.