Many small individuals start with a sole proprietorship to the costs of forming a corporation or LLC. This can be a wise decision as statistics show that a lot of small businesses generate losses for the first several years. The 'payroll' tax applies at a limited percentage of one's working income - no brackets. The employee, obtain a 6.2% of the working income for Social Security (only up to $106,800 income) and 4 transfer pricing .45% of it for Medicare (no limit). Together they take ad...