Thanks SK for your input. I think the extra medicare tax I end up paying according to some prelim estimates will be about $2000, but I think it’s a wash (no pun intended) because what I could end up reporting as expenses would go more than that.
Also, maybe I’m wrong, but I don’t think I would be subject to self-employment tax, right? I think since I am still full time employed by my W2 employer, they’ve already paid for SS taxes, so I would not need to pay additional self-employment tax on top of that…?[/quote]
Correct, no SS portion of the SE tax if your w-2 is already over the SS wage limit. Just medicare, and bonus medicare when earned income goes over $250K. I think that’s .9%.
Also as a bonus, you get to deduct above the line what would otherwise be investment interest expense below the line if you buy anything on margin.[/quote]
Thank you sir!
Although I knew, this it’s pretty self evident that being a solo W2 is a very unfavorable situation to be in the U.S. tax code. But then again, who didn’t know that.
