Sole proprietor? Independent contractor? New tax code has goodies for you

Tax code

This article from CNBC is aimed at people who are considering leaving jobs to work for themselves, but it does a good job explaining the new tax code for those who are already their own boss.  That includes many veterinarians, of course.

If you’re one of them (or plan to be), read on:

The share of “nontraditional workers” in our labor force — such as independent contractors and freelancers — has been growing faster than any other type of worker.

The new tax code is likely to accelerate this trend, thanks to the big tax break it offers to businesses run by individuals. Independent contractors (or sole proprietors) can now write off 20 percent of their business income in many cases.

[…]

For some people, the conversion from employee to independent contractor could be worthwhile, particularly for those in a high tax bracket, said Howard Gleckman, a senior fellow with the Tax Policy Center. Then there are people who have no choice but to be an independent contractor.

In addition, baked into the new code is yet another incentive for employees to, well, not be employees: Certain employee deductions are gone, while business write-offs remain.

Good news if you’re already self-employed. If you’re not but are thinking of being, the article on the new tax code will give you some reasons to pause. And while the article isn’t the be-all, end-all to the discussion, it does provide a good jumping-off point for your own research.