Social Security

Successful efforts to trim your taxable business income can produce double savings. In addition to cutting your income tax bill for the year, you may also save on Social Security and Medicare taxes. The Social Security tax is 12.4 percent of self-employment income, up to $87,900. Medicare tax of 2.9 percent applies to all of your self-employment income.

One caveat: Reducing your self-employment income may reduce the amount of Social Security benefits you will receive.

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