Jack Mercer has a post on self-employment tax sticker shock that put me in a nostalgic frame of mind. When we first got married, Brian was a graduate student and did some consulting. I worked at the university library. In other words, we were poor. After graduation, he got a job with an actual salary. He also happened to do a lot of consulting that year. We thought we were rich... until we visited the accountant. Oh boy. He kept asking "Are you sure you don't have more deductions?" So now that Brian is a professor, we can rest secure in the knowledge that nearly 50% of every consulting dollar he earns goes to taxes. And, just for fun, we get to pay the City of Kansas City 1% of everything for the privilege of living or working here.
Be sure to check out Jack's plan for a new, simplified tax form.
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