Self-employment tax is a type of tax that self-employed individuals must pay. It is similar to the Social Security and Medicare taxes that employees pay, but self-employed individuals are responsible for paying both the employee and employer portions of the tax.
There are a few different ways to avoid paying self-employment tax. One way is to incorporate your business. When you incorporate your business, you become a corporation, and corporations are not subject to self-employment tax. Another way to avoid paying self-employment tax is to form a partnership. Partnerships are not subject to self-employment tax, but the partners are personally liable for the debts and liabilities of the partnership.
