Will the Self-Employed Be Excluded From President Trump's Payroll Tax Break?
The COVID-19 outbreak has spurred an extreme economic recession that's left millions of Americans without a job. It's also forced the closure of over 100,000 small businesses, with more potential damage yet to come.
It's for this reason that lawmakers are busy trying to negotiate a stimulus deal to follow the CARES Act that was signed into law in late March. But so far, negotiations have been slow and unproductive, and so last weekend, President Trump decided to take matters into his own hands. Specifically, he signed a number of executive orders, one of which is a temporary payroll tax holiday for employees who make $104,000 or less on an annual basis.
Normally, employees who work for other employers pay a 6.2% Social Security tax on up to $137,700 in annual earnings (this threshold changes from year to year). They also pay a 1.45% Medicare tax on all of their earnings. Meanwhile, their employers pay the same amount of tax on their behalf.
Source Fool.com
