What You Don’t Know About Jobs at Home

Posted by KC Morgan Dec 17, 2008

What you don’t know about jobs at home can easily be remedied - simply start on the path of self employment. However, trial by fire can be a pretty stressful experience. Get prepared by finding out what you don’t know, before you find yourself struggling even with steady jobs at home.

Finding, and performing, jobs at home is the secret to self employment success. How much you enjoy that success directly relates to how you handle everything else associated with jobs at home.

Jobs at Home

For one, if income earned through jobs at home is your primary or only source of money, you’re officially self employed. What that means to you is that you now have to pay a special self employment tax - money you’ll owe the government at least once a year. How much?

What, you don’t know the formula for self employment tax when you earn through jobs at home? Basically, you multiply your net self employment income by 92.35%. This amount is your net earnings. Any earned amounts in excess of $76,200 for the year then get multiplied by 2.9%. Earnings under this amount are multiplied by 15.3% (this is Medicare and Social Security). You’ll add the two amounts together and that’s how much you owe for the pleasure of enjoying jobs at home.

This formula can be intensely confusing, but think about it another way: when the math is all said and done, self employed professionals pay an additional tax that equals up to about $14 on every $100 earned. For instance, the person in question earns $100,000 on the year. They will pay $14,000 in self employment taxes. Then, they'll pay income taxes, too.

How much does that cost? Income taxes are a little harder to understand - they are calculated on a sliding scale, and through withholding not all income is taxable. But suppose you make about $15,000 taxable income on the year. Using the current scale, this adds up to about $15 (15%) for every $100 earned.

In order to pay all your taxes, in this scenario it would be necessary for you to save approximately $30 from every $100 earned. Does that put it into perspective?