On Sept. 8 President Obama unveiled The American Jobs Act — a set of proposed tax incentives intended to help create more jobs. It is far from clear if any of these proposals will be enacted because they face significant opposition in the Republican-controlled House of Representatives.
If they are enacted, however, they will have a big — and largely positive — effect on self-employed real estate agents and brokers. Here are the basics of the president’s proposals:
Reduced Social Security taxes
The cornerstone of the jobs plan is a further temporary reduction of the Social Security taxes paid by employers, employees and the self-employed. Ordinarily, employers and employees pay a 6.2 percent Social Security tax up to an annual income ceiling — $106,400 in 2011.
The self-employed pay a 12.4 percent Social Security tax on their net self-employment income up to the annual ceiling. In 2011, the employee’s portion of the tax was reduced to 4.2 percent.