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Retirement tax questions
Sorry, I wrote the formula wrong. I should have written 1 - 1 / (1 + BaseRate) or BaseRate / (1 + BaseRate). For a 25% base rate the self-employed rate is 25% / (1 + 25%) = 20%. I've corrected that. For a 20% base rate contributed on behalf of the W-2 employee, the self-employed rate must be 20% / (1 +20%) = 16.6667%. The self-employee rate for each whole percentage point increment of the base rate is listed in Rate Table for Self-Employed in Chapter 6 of IRS Pub 560.
‎April 18, 2022
1:22 PM