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"And freelancers appear to make less than their W-2 counterparts, as their up-front income doesn’t reflect the business deductions that will lower their taxes l
by javery 17y ago
"And freelancers appear to make less than their W-2 counterparts, as their up-front income doesn’t reflect the business deductions that will lower their taxes later."
This line makes no sense at all. Almost all freelancers will appear to make MORE than their W-2 couterparts and it isn't until you factor in payroll taxes and things like retirement/healthcare benefits that you figure out what a freelancer actually makes.
- mrkurt 17y agoThe mortgage companies ask for 1040s from previous years, so they're generally looking at your take home after taxes. When I was self employed, my take home was generally substantially less than it could have been, because I could leave money in the corporation. I suspect it's similar for most people who use corporations intelligently.