What are the similarities and what are the differences between regular employees and self-employed people? Make a chart and fill it in with details. (write difference each in 3 points each)
Answers
Answer:
Someone who is self-employed generally works for themselves as a business owner, freelancer, or as an independent contractor for another company. Earnings are usually directly from the business or freelancing, instead of salary or commission-based reimbursement.
Definition
The Internal Revenue Service defines an individual as being self-employed, for tax purposes, as:
You carry on a trade or business as a sole proprietor or an independent contractor.
You are a member of a partnership that carries on a trade or business.
You are otherwise in business for yourself (including a part-time business).
Employment Status
When you are employed by a company you are considered an employee. Employees are on the company payroll, and the employer withholds federal and state taxes, Social Security, and Medicare.
Employees are provided with unemployment and workers' compensation insurance. Employees may be offered benefit packages that include things like paid sick leave, vacation, health insurance, or 401(k) or other retirement plan participation.
Self-Employment Taxes
If you're self-employed, you are responsible for paying your own taxes to the Internal Revenue Service (IRS) and to your state tax department. Even if you do not owe any income tax, you must complete Form 1040 and Schedule SE to pay self-employment Social Security tax.
In addition to income taxes, self-employed workers must also pay Social Security and Medicare taxes in the form of SECA (Self-Employment Contributions Act).
Independent contractors are not entitled to employee benefits, even those mandated by law like unemployment and worker's compensation because they are not employees of a company. Unlike a typical employee, independent contractors work less regularly. They work as and when required, and usually bill by the hour or per project, depending on the terms of their contracts.
From a tax perspective, employing regular employees costs significantly more for employers than independent contractors because they are required to pay Social Security, Medicare, State and unemployment taxes in addition to consistent, salary or wage-based work.
Health Insurance and Other Benefits
However, self-employed individuals and independent contractors may be able to purchase health insurance and other benefits for you through the Affordable Health Care Act (Obamacare) or through organizations like the Chamber of Commerce or others groups that provide benefits for self-employed workers and small business.
Explanation:
similarity is that both the types of employees work and difference is that self-employed people do not depend on anyone and process their job in the way they want but regular employees depend on their boss or someone for their salary etc........