I can’t pay 40% of my income. I may as well be unemployed.
I am looking at two options.
1)I can start drawing SS next year.
2)Convert to a Chapter S from an LLC next January
This administration is obsessed with people who work independently. Slapping us with a 40% tax rate is punitive and meant to either shut you down or move you to a Chapter S where they can collect taxes from your paycheck or determine that you do not have a ‘real’ business, but a hobby and take all those deductions away from you. Chapter S requires you to take a reasonable paycheck and if you cannot do that on a regular basis, then you do not have a business. https://www.irs.gov/businesses/small-businesses-self-employed/paying-yourself
Biden rule threatens to throw independent contracting into disarray
https://thehill.com/opinion/congress-blog/4506646-biden-rule-threatens-to-throw-independent-contracting-into-disarray/
Essentially with all the new rules for IC’s already in place, even if you are an LLC doing B2B work, you could find your client putting you on their payroll.
This is all a mess already and looks like it is just going to get worse. This all stems from the government greed and debt when one really thinks about it.