Prior to Nov,1, 2003 the per diem rate for meals was 65% of $40 per day.After Nov,1, 2003 the rate increased to 70% of $41 per day.The deductible portion of food or beverage expenses gradually increases for individuals during, or incident to, the period of duty away from home and subject to the hours of service limitations of the Department of Transportation (Â§ 274(n)(3)).fter Nov,1, 2003 the rate increased to 70% of $41 per day. The deductible portion of food or beverage expenses gradually increases for individuals during, or incident to, the period of duty away from home and subject to the hours of service limitations of the Department of Transportation (Â§ 274(n)(3)).
You pay your self-employment tax when you pay the rest of your taxes. Self-employment tax is reported on your Form 1040. You can use Schedule C to figure out your net earnings if you are a sole proprietorship or LLC, or you can use your business tax return to figure your net earnings if you are a S-Corp.
1. Half of Your Self-Employment Tax. When employed, your employer pays half your Medicare and Social Security taxes, and you pay the other half through payroll taxes. When you are self-employed, you must pay all of it, through self-employment tax. However, as your own employer, you are entitled to deduct half of it. Deduction or not, though, self-employment tax can be a big cost for an independent contractor. Knowing how self-employment tax is calculated is important when considering employment versus contracting.