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Say whaaat? You must not be based in the USA then. Owning your own business means EVERYTHING is a tax write-off. I mean everything. Food you spend on lunch, you

Say whaaat? You must not be based in the USA then. Owning your own business means EVERYTHING is a tax write-off. I mean everything. Food you spend on lunch, your home office space, anything you spend money on during the course of doing business. All of it is a tax write-off. You do not get any of those write-offs if you work a corporate gig. If your income is the same in both cases, you will pay significantly less tax as a freelancer.

nickjj 8y ago
I do live in the US as a solo freelance developer. You can't write off food in most cases, and if you happen to work from home, you can write off some of your home office (based on square feet), assuming you have a separate work room from where you sleep. For example, you can't just buy $300 / month in groceries and expect to be able to write all of that off because you happen to eat 3 meals during "work hours". Sure if you goto a tech meetup once in a while and eat dinner out, you could write that off, but that's an outlier situation (at least for me). Having your employer match a retirement fund + benefits + not having to pay both halves of social security is a lot more money saved than being able to write off buying a computer, cell phone or a couple of meals.
- iamcasen 8y ago
  Yeah, not 300 a month in groceries, but you can write off your internet bill, you phone bill and all that. Obviously if you can get an employer match for retirement and good benefits that's true, that's a huge part of compensation that's not taxed.
  - nickjj 8y ago
    > but you can write off your internet bill, you phone bill and all that. Internet + phone is about $80 / month total. Even if you somehow managed to write off $100 / month in food (which I think is a stretch) that's still only $180 / month. Compare that to paying for health insurance which is around $500 per month per adult for the worst coverage possible. Normally this is a freebie for being employed. Then you get about a 7% increase in post-tax income just because your employer pays half of your social security. Then on top of that you might get matching up to a certain percent in a retirement fund. Then on top of that you might get other forms of insurance plus stock benefits. Then on top of that you might get free lunch every day too. Long story short, writing off $150-200 / month in business expenses is not even in the same galaxy as not having to pay $500 per adult for health insurance plus an extra $7,000 in your pocket per year from going halfies on the social security (100k salary). That's already wildly better and it's not even taking into account for retirement matching perks, stocks, other insurances, free lunch every working day, etc..
    - iamcasen 8y ago
      Yeah you're totally right. In my freelancing days, I didn't need healthcare really, I was 22. That being said, I feel like a good software consultant can pull down 250/hr, which probably more than compensates for healthcare. You'll pay more tax, and more for healthcare, but probably still come out ahead. So maybe that's the formula, work a corporate gig until you're a legend, and then become a consultant. :P

nickjj 8y ago

I do live in the US as a solo freelance developer. You can't write off food in most cases, and if you happen to work from home, you can write off some of your home office (based on square feet), assuming you have a separate work room from where you sleep. For example, you can't just buy $300 / month in groceries and expect to be able to write all of that off because you happen to eat 3 meals during "work hours". Sure if you goto a tech meetup once in a while and eat dinner out, you could write that off, but that's an outlier situation (at least for me). Having your employer match a retirement fund + benefits + not having to pay both halves of social security is a lot more money saved than being able to write off buying a computer, cell phone or a couple of meals.

iamcasen 8y ago
Yeah, not 300 a month in groceries, but you can write off your internet bill, you phone bill and all that. Obviously if you can get an employer match for retirement and good benefits that's true, that's a huge part of compensation that's not taxed.
- nickjj 8y ago
  > but you can write off your internet bill, you phone bill and all that. Internet + phone is about $80 / month total. Even if you somehow managed to write off $100 / month in food (which I think is a stretch) that's still only $180 / month. Compare that to paying for health insurance which is around $500 per month per adult for the worst coverage possible. Normally this is a freebie for being employed. Then you get about a 7% increase in post-tax income just because your employer pays half of your social security. Then on top of that you might get matching up to a certain percent in a retirement fund. Then on top of that you might get other forms of insurance plus stock benefits. Then on top of that you might get free lunch every day too. Long story short, writing off $150-200 / month in business expenses is not even in the same galaxy as not having to pay $500 per adult for health insurance plus an extra $7,000 in your pocket per year from going halfies on the social security (100k salary). That's already wildly better and it's not even taking into account for retirement matching perks, stocks, other insurances, free lunch every working day, etc..
  - iamcasen 8y ago
    Yeah you're totally right. In my freelancing days, I didn't need healthcare really, I was 22. That being said, I feel like a good software consultant can pull down 250/hr, which probably more than compensates for healthcare. You'll pay more tax, and more for healthcare, but probably still come out ahead. So maybe that's the formula, work a corporate gig until you're a legend, and then become a consultant. :P