04-15-2026, 05:55 PM
The "No Tax on Tips" is, of course, a misnomer and inaccurate, as while you get a Federal Income tax break on up to $25K tips (IIRC), you still pay the much larger Self-Employment tax on all your income, including tips (the olds want their Social Security and Medicare money, regardless of any possible complaints about redistribution in the past).
Excellent point Yak! - I would like to clarify just exactly what is meant by the "Self-Employment tax."
Generally, an employee of a company pays 6.2% for Social Security tax and another 1.45% for Medicare tax for a total of 7.65% of earned wages. The company that employee works for then MATCHES that same tax, thus remitting to Uncle Sam a TOTAL of 15.3% of the wages earned in your name.
A Self Employed 1099 Independent contractor thus has to pay and remit that same TOTAL of 15.3%. There is no point in even mentioning the salary caps as there is no way a Doordasher on the Big Island is earning $184,500 in a year.
In the meantime, damn straight - that this "olds" wants her rightful due! And no one better complain about that!
Excellent point Yak! - I would like to clarify just exactly what is meant by the "Self-Employment tax."
Generally, an employee of a company pays 6.2% for Social Security tax and another 1.45% for Medicare tax for a total of 7.65% of earned wages. The company that employee works for then MATCHES that same tax, thus remitting to Uncle Sam a TOTAL of 15.3% of the wages earned in your name.
A Self Employed 1099 Independent contractor thus has to pay and remit that same TOTAL of 15.3%. There is no point in even mentioning the salary caps as there is no way a Doordasher on the Big Island is earning $184,500 in a year.
In the meantime, damn straight - that this "olds" wants her rightful due! And no one better complain about that!