What Kind of Taxes Do I Have to Pay as an Owner Operator?
What kind of taxes an owner-operator has to pay for income. That’s a question that we get a lot from new owner-operators that are stepping out away from a company truck, getting their own truck, and being their own boss. But now it’s tax season.
And I’m going to give you a short answer here, there’s a much longer answer that we’re happy to talk to you about over the phone or refer you to somebody.
In addition to the income tax that you’ve always been paying, at the federal and state level, you also have to pay self-employment tax.
This is the same thing as the FICA tax was coming out of your paycheck when you drove for somebody else, but now you have to pay both halves of that. Before, your employer was paying half, and you were paying half. Now, you have to pay the full 15.3% on every dollar of your profit on the first $147,000 in 2022.
So if you as an owner-operator make $60,000, 15.3% of that is over $9,000 and we haven’t even talked about income tax! It really becomes a lot of money and you’re going to want to plan ahead for it. You can do this by paying yourself a payroll each week and having it taken out that way, or through estimated payments.
If you have any questions about owner-operators reach out to us!
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