If you qualify to report your W-2 wages on Schedule C (to avoid losing your employee business expenses), will you get any credit for the FICA taxes withheld from your W-2?
And another question … would you get any credit for the employer matching the FICA taxes?
If you believe that a large part of your tax savings could go down the drain (through the additional self-employment taxes you would pay), you’d be right.
Sound complicated? Well it is … but we’ll explain everything in easy-to-understand language when you read my new article titled Tax Tips: TCJA Tax Reform Q&A: Does Moving W-2 Income and Employee Business Expenses to Schedule C Increase Taxes?
Three ways our fact-filled article can help you:
- We’ll tell you why you could wind up paying more taxes if you’re not careful. That’s right. In about 50-percent of cases, the movement to Schedule C actually increases tax liability. Why? Well it’s all in the numbers as we’ll explain when you read the full after-tax-reform article.
- You’ll learn why it’s hard to decide which tax strategy to follow. The fact is, the IRS keeps changing its mind. And not a single case has been tried since a key IRS memorandum expired in 1999. We’ll explain this ambiguous situation in detail when read the full after-tax-reform article.
- We’ll give you an important tax-planning tip. Are you thinking about pursuing independent-contractor status? Then please take my advice and run the numbers before you make a move. And be sure to assume that the IRS will win its litigation strategy. We’ll tell you the whole story when you read the full article.