For hair stylists pursuing a career in the vibrant world of beauty and fashion, the journey often takes exciting twists and turns. One critical aspect that accompanies this journey is understanding self-employment taxes. As an independent contractor or a self-employed hair stylist, you're responsible for managing your finances, including paying taxes. In this guide, we'll delve into the intricacies of self-employment tax, shedding light on what it entails and how you can navigate it successfully.
The Basics of Self-Employment Tax
Self-employment tax is a combination of Social Security and Medicare taxes that individuals who work for themselves, such as freelancers, independent contractors, and sole proprietors, are required to pay. Unlike employees of a company, self-employed individuals are responsible for both the employer and employee portions of these taxes. In essence, while employees split these taxes with their employer, self-employed professionals shoulder the entire burden.
