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Anyone know of a calculator that helps people see the tax implications between W2 employment and Self Employment. For example say I make $100k/year as a contractor/self-employed vs $80k/year as a W2 salaried employee. It would be great to have a calculator that could show how much tax I would have to pay as a contractor vs as a W2.
I don't need anything that compares benefits like health insurance, life insurance, etc ... Really just looking to compare salaries and tax implications. Thank you.
There are a lot of web sites out there that have these types of calculators. TaxAct and TubroTax both have online calculators.
The calculators don't explain in detail what is happening behind the scenes. If you play around with their online tax filing software enough you can create virtual scenarios that help one learn the ropes.
Sole proprietors and LLCs that file as a sole proprietor will pay 15.3% in self employment tax, in addition to the normal tax that is on their taxable income. Not to forget filing jointly combines ones taxable income with their spouses.
