Is there a downside of self-employment?

The downside of self-employment, from an income tax standpoint, is that you must pay all your own and half of your employees' Social Security and Medicare tax. This tax, amounts to 15.3% and is split 50-50 between employers and employees. But if you are self-employed, you must pay the full amount yourself, an extra 7.65%.

Additionally, self-employed individuals, particularly independent contractors, are IRS audit targets; they are more likely to have unreported cash income.