Retirees Face Unexpected Self-Employment Tax Burden
Many retirees in the United States are encountering an unexpected financial burden due to self-employment taxes. As retirees often take on part-time work as independent contractors or freelancers, they are required to pay self-employment taxes on their earnings. This tax, which amounts to 15.3%, covers both Social Security and Medicare contributions, a cost typically shared with employers in traditional W-2 jobs. The IRS treats all freelance or consulting income as self-employment income, which can be surprising for retirees who previously held W-2 positions. To manage this tax obligation, retirees are advised to set aside a portion of their earnings for taxes and consult with accountants to determine deductible business expenses. 
