On being self-employed.

[kelson]

Hello, I was wondering if everything I've read so far concerning author's earnings more or less meshes with your own experience concerning things like taxation and health insurance and such. So far I've got that about half the wages earned goes to taxes, with another 20 percent or so going to health insurance? Does that sound more or less correct? And are there any other aspects of the financial side of things that were unexpected?

[scalzi]

My advice to you is to sit down with an accountant and figure out what you'll need to do with taxes and etc. It'll be very helpful. And yes, your tax burden goes up because you are paying the part of your social security tax that used to be handled by an employer. You'll also have to file your taxes quarterly. It's a great joy, as you can imagine.

[kelson]

Quarterly? Whoa. That all...puts a new perspective on what it takes to be a professional writer for me, in terms of 'when to quit one's day job'. Thanks.

[Axeminister]

It's tough.
Of course the percentage of the health insurance is based on what you make.
The tax, well, that could be the same. (I'm speaking of brackets)

If you have a pay stub from a job, look at the taxes taken out.
Now double it.
Then pay the large chunks every 3 months.

The good news is you have more write offs. A good tip is your car. Depreciation. That was a big saver for my wife and I last year. (Computers, gas, entertainment (some) etc.) All write off. Donations too, never been a better excuse to do it. =)

[kelson]

Thanks for the heads-up. The subject of write-offs sends me to tax prep hell. In my case, that would definitely make it time for an accountant.