Self Employment Tax in Fort Payne, Alabama

Find the Right Lawyer Now

In Fort Payne, Alabama, there are certain taxes that are enforced on employees, which are deducted from their paychecks. The mostly well-known employment taxes are the Medicare and Social Security tax, for which a small percentage of every employee's paycheck is deducted.

It's critical to note that if you are self-employed, you're still liable for those taxes, and it's your responsibility to figure out what you owe.

Most often, employers handle all of these calculations. With regular salaried and hourly employees, this is an easy procedure, and any decent payroll computer software can do it automatically. But, if you work for yourself, it is your responsibility to figure out exactly what you owe.

Self-Employment tax obligations in Fort Payne, Alabama

If you derive even a small percentage of your income from running your own business, or working as an independent contractor, you have to pay the "self-employment tax." This tax applies to everybody who makes more than $400 per year from self-employment.

For ordinary employees, Social Security and Medicare payments are made in equal parts by the employee and employer. This effectively means that every employee's contribution to his or her future Medicare and Social Security benefits is matched by the employer.

However, if you are a self-employed business owner in Fort Payne, Alabama, you are responsible for both the employee and employer contributions to Medicare and Social Security. This essentially doubles your self-employment tax rate.

The self-employment tax rate is 15.3% of all self-employment income, assuming your income from self-employment exceeds $400 per year in Fort Payne, Alabama. But half of your self-employment tax liability can be deducted from your income tax. This results in a slightly reduced income tax bill, which partially offsets this additional tax burden. It essentially means that the self-employment tax only applies to 92% of your income, as opposed to all of it. This means that your effective self-employment tax rate is about 14%, as opposed to over 15%.

Find a Fort Payne Lawyer that Specializes in Your Area of Need:

Can a Fort Payne, Alabama Tax Attorney Help?

Self-employed individuals in Fort Payne must ensure that they keep good, thorough financial records. This makes it much easier to determine what you owe, and, if you need a tax attorney, it makes it easier for them to help you with your legal tax issues.

If you have any difficulty calculating your self-employment tax liability, an experienced Fort Payne, Alabama tax attorney would likely have very little trouble assisting you figure it out. A reputable lawyer can also give you practical legal advice, which can help you avoid more significant tax law issues in the future, by dealing with them before they become problematic.

3 Tax Law cases posted to LegalMatch lawyers in Fort Payne

Self-Employment Tax Attorneys in the Largest AL Cities

Show Alabama Cities

Self-Employment Tax Lawyers in Other Alabama Cities and Towns


Find the Right Lawyer Now

Top Rated Lawyers

View attorney profiles and see how other LegalMatch users rate attorneys that may respond to your case.

Employment and Labor Law Lawyer
LegalMatch Employment and Labor Law Lawyer Jon M.

Jon M.

KING, WA

Employment and Labor Law

Rating (5 users) *****
See Reviews
Business - Litigation Lawyer
LegalMatch Business - Litigation Lawyer David B.

David B.

KITSAP, WA

Business - Litigation

Rating (1 users) *****
See Reviews
Employment and Labor Law Lawyer
LegalMatch Employment and Labor Law Lawyer Howard S.

Howard S.

FORT BEND, TX

Employment and Labor Law

Rating (1 users)
See Reviews
Family Law Lawyer
LegalMatch Family Law Lawyer Robert H.

Robert H.

TRAVIS, TX

Family Law

Rating (5 users) ****
See Reviews

Need a Lawyer?

No obligation - Lawyers compete for your case. Choose your issue & get started now: