Hi Candiecook,
That is a great question! It pays to be prepared.
As an independent contractor you are responsible for what is referred to as the Self employment tax of 15.3%. As an employee, you share that cost with your employer, as each of you pay a share of the FICA tax (Social Security tax and Medicare). Your share is automatically taken out of your paycheck so it doesn't typically show up on your tax return. When you're self-employed, though, you're stuck with the full amount yourself.
- 12.4% for Social Security. For 2021, this part of the tax applies to the first $142,800 of earnings. If you earn more than that (from self-employment or, if you also have a job, from the combination of your job and your self-employment), then the 12.4 percent part of the tax that pays for Social Security stops for the year.
- 2.9% for Medicare. The Medicare portion of the self-employment tax doesn’t stop. No matter how much you earn, you'll pay the 2.9 percent Medicare tax.
Additionally, your self employment income will be subject to income tax, which will depend on your income bracket.
Both links below have a lot of details regarding self employment tax and how to be prepared.
A guide to self employment tax
The self employment tax
Hopefully that helps and good luck with your adventure.
