Category: Key Terms

Short Version: 1099 workers pay 15.3% tax – the Employer AND Employee components; but, can reduce their overall taxable wages.                                                                                               ...

Short Version: Put aside pre-tax dollars to pay for specific costs. It is “use it, or lose it” so you have to spend those funds that year or forfeit them.                                                             ...

Short Version: FICA mainly funds Social Security and Medicare. It involves contributions split equally from both employees and employers – Social Security tax is 12.4% and Medicare tax is 2.9%. If you are a 1099, you are...

Short Version: The Qualified Business Income (QBI) deduction is a tax provision in the United States that allows certain business owners to deduct up to 20% of their qualified business income from their taxable income. The QBI...