Plan for taxes as a W-2 employee or 1099 contractor: test your skills
Contractors pay both halves of Social Security and Medicare, make estimated payments and keep their own records. Answer each question to see the explanation; your score appears at the end.
This test checks that you can
- Compare W-2 and 1099 tax treatment
- Calculate self-employment tax
- Set up estimated payments and records
- Practice
1. Who usually has taxes withheld from pay?
- Practice
2. Self-employment tax rate on net earnings is…
- Practice
3. Contractors usually pay taxes…
- Key idea
4. Which statement best explains "No withholding, no safety net"?
- Key idea
5. Which statement best explains "Both halves of payroll tax"?
- Key idea
6. Which statement best explains "Records lower tax"?
- Action plan
7. In the action plan, which step comes first?
- Mistake to avoid
8. Which of these is a mistake this lesson warns against?
- Mistake to avoid
9. Which of these is a mistake this lesson warns against?
Using the simplified method, what is self-employment tax on $20,000 of net earnings?
Show the answer
About $2,825.91
$20,000 × 0.9235 = $18,470. × 0.153 = $2,825.91.
If you freelance, open a separate account and move a fixed share of your next payment into it.
More tests in this bootcamp
- Read tax brackets one layer at a time
- Tell a tax credit from a tax deduction
- Compare the standard deduction with itemizing
- Check sales tax before the receipt surprises you
- Keep the receipt records that matter at tax time
- Understand why holding time changes capital gains taxes
- Understand tax-loss harvesting and the wash-sale rule
- Plan for taxes as a W-2 employee or 1099 contractor
- Keep charitable giving records and understand the tax rules
- Know when your taxes need a professional
- Final exam: Taxes