Carolyn operates a consulting business as a sole proprietor (unincorporated). carolyn has been approached by one of her major clients to become an employee. if she accepts the new job, she would no longer operate her consulting business. from the standpoint of paying social security taxes, would carolyn's social security taxes increase or decrease if she becomes an employee? why? (assume carolyn will earn less than $200,000.)
Carolyn's social security taxes will decrease if she becomes an employee. If she would become an employee, her employer would pay part of the social security taxes thus she won't have to pay for it. The employers is required in the federal law, to pay part of the social security taxes of their employees.
