One thing most self-employed people know about their business, if they are successful, is that only a tiny part of what you charge a client is what you will take home to pay the bills.
These are my numbers, which will vary widely from business to business. Your age makes a big difference in medicine, for example.
According to my numbers this morning, I could break down every $100 into four major categories:
- $19 Medical Expenses
- $36 Business Expenses
- $14 Federal and State Taxes [Self-Employed pays double vs. staff person; no, you don’t get to take home more because you don’t spend more as a staff person. The company pays that other 1/2.]
- $31 Net Income
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