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Originally Posted by Catlady
It's not quite that bleak, though--half of the SS tax is tax deductible, all the health insurance is deductible, home office expenses are deductible. Plus there's the savings on commuting, both money and time.
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It would be worthwhile if it was a tax credit but as a deduction, it has very limited utility. If your tax bracket is 15%, you have to spend $1 to get a deduction of 15 cents -- still a loss of 85 cents.
I have been a self-employed editor for 27 years and I wouldn't trade it for the world. (I began in publishing working for a couple of the BPHs.) But an effective hourly rate of $25 when working is really closer to $10 an hour over the course of a work-year, not $25 an hour.