An independent contractor is a individual who contracts to execute services for others without holding the legal position of an employee. Most people who qualify as independent contractors follow their ain trade. concern or profession. They are in concern for themselves.
There are advantages of being an independent contractor. Independent contractors are virtually your ain foreman. There is a batch of freedom that comes in being in concern for yourself. You can take how. when. and where to work. for every bit much or small clip as you want.
Independent contractors besides are Masterss of their economic destiny. The sum of money you make is straight related to the quality and measure of your work. Independent contractors don’t have to inquire their foreman for a rise ; if they want to gain more. they merely have to travel out and happen more work. And because most independent contractors are non dependent on one individual company for their support. the hiring and firing determinations of any one company don’t impact IC’s as they do regular employees.
The OASDI plan limits the sum of net incomes capable to revenue enhancement for a given twelvemonth. The one-year bound this twelvemonth in 2008 is $ 102. 000. The OASDI revenue enhancement rate in 2008 for rewards paid is set by legislative act at 6. 2 per centum for employees and employers. each. The OASDI revenue enhancement rate for self-employment is 12. 4 per centum in 2008. The HI revenue enhancement is provided chiefly by revenue enhancements levied on rewards and net ego employment income. It is compulsory for province and local authorities workers hired since April 1. 1986. HI revenue enhancement is levied on all net incomes. Since 1992. merely 92. 35 per centum of net self-employment is nonexempt and half of the SECA ( Self Employment Contributions Act ) revenue enhancements so computed is deductible for federal income revenue enhancement intents.
I would state my employee that our company could return the excess sum of FICA revenue enhancements paid. Besides. you can acquire back the extra Social Security that was withheld when you file. However. claiming that recognition for extra Social Security revenue enhancements on your return doesn’t warrant that you’ll acquire a cheque from the IRS for that sum.
Bell. Kay.Tax tips:Social Security16 March 2007
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