If someone is self employed in the United States, they’re subject to a tax called the US Self Employment Tax. Here are some details about what the self employment tax is, why it exists, and how it is paid:

Why Does the US Self Employment Tax Exist?

The Self Employment Tax is a social security and Medicare tax on the net earnings of self employed individuals in the United States. Wage earners (people who work for someone else and have taxes automatically withheld from their paychecks) also pay social security and Medicate taxes. However, those taxes are generally paid in part by the wage earner and in part by their employer. The self employed are responsible for paying the entire tax, as they essentially serve as both employer and employee. (more…)

In its most basic sense, self employment simply means that someone works for themselves. People often refer to the self employed as either entrepreneurs or business owners. However, there are several types of self employment that can be pursued by anyone wanting to work for themselves. Here are some of the various types of self employment opportunities available:

Entrepreneurs / Small Business Owners – Generally the term “entrepreneur” is used when talking about small business owners of traditional businesses, although the term does have broader connotations, and is used to describe other types of self employed individuals more now than in the past.

Online Business Owners – Also known sometimes as Webpreneurs, these online entrepreneurs work for themselves earning all of their income online, through online advertising, online retailing, online services, or in other ways. (more…)

Many people dream of eventually becoming self employed, whether their dreams revolve around starting their own business or launching a freelance career. Some people have what it takes to be self employed, and other simply don’t. But when deciding if entrepreneurship is the right option, it’s a good idea to turn to some of the most common qualities of successful entrepreneurs to see if the odds are in your favor. Here are several common qualities of the successfully self employed:

Hard-working – Entrepreneurs can’t afford to be lazy. They need to be go-getters, and willing to put in more hours, not less, than they would if they were working for someone else.

Confident – The chances of entrepreneurial success are slim if the business owner or freelancer constantly doubts their ability to succeed or lacks confidence. (more…)

Despite the many benefits of working for one’s self, self employment isn’t all fun and games. Just like working for someone else, there are downsides or drawbacks of self employment or entrepreneurship. Here are some problems or stress factors faced by the self employed, and sometimes overlooked when deciding whether or not to jump into entrepreneurship or freelancing:

1. Being self employed often involves a heavy workload, and it can be time consuming. Many entrepreneurs find themselves working more hours when self employed, than they were working under a full-time employer.

2. Entrepreneurship and freelance careers put a lot of responsibility and general stress on someone who’s self employed, so they have to have the ability to prioritize, delegate, and cope. (more…)

People dream of working for themselves for good reason. There are a lot of perks associated with being self employed, whether it’s through a freelance career or starting a business. Here are some of the benefits of self employment:

1. To at least some degree, the self employed can set their own hours.

2. There’s often more freedom in taking vacation time or sick time, as long as arrangements are made (depending on the type of business and client needs).

3. The self employed can often avoid getting stuck in rush hour traffic, by either working at home, or adapting their commute time to a different schedule. (more…)