Self Employment Tax in Avondale, Arizona
In Avondale, Arizona, there are particular taxes that are enforced on employees, which are deducted from their paychecks. The generally 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 accountable for those taxes, and it's your responsibility to figure out what you owe.
In most cases, employers make all the necessary calculations to determine how much needs to be deducted from an employee's check to pay these taxes. It's normally very simple, and any decent payroll software can automate this process. But the self-employed are accountable for figuring this out for themselves, or hiring an accountant to do it.
Self-Employment tax obligations in Avondale, Arizona
If you own a sole-proprietorship, or work mainly as an independent contractor, you need to pay the "self-employment tax" if you derive any considerable amount of income from self-employment. You must pay these taxes if your income from self-employment is more than $400 annually.
For people who are employed by another person or company, the employer normally matches the employee's contributions to Medicare and Social Security. This basically means that, when you look at your Medicare and Social Security tax statements on your paychecks, you can know that those programs are actually getting double what's shown there - with your employer covering the other half.
But, if you are self-employed in Avondale, Arizona, you are accountable to pay both the employee and employer share of the employment tax. Basically, this means that the employment tax for self-employed individuals is double what it would be for regular employees.
The total self-employment tax (note that this is totally distinct from the income tax) is set at 15.3%, if your income from self-employment in Avondale, Arizona exceeds $400. But, half of this tax is deducted from your income, for income tax purposes. Therefore, this means that, at most, the self-employed only have to pay income on 92% of their total income, and that amount may be lowered with further deductions for which you may be eligible. This means that, basically, the self-employment tax rate is only 14%, as opposed to 15.3%
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Can a Avondale, Arizona Tax Attorney Help?
If you're self-employed in Avondale, you need to keep complete records of all your income and expenses from the operation of your business. This will make it much easier for you to calculate your taxes when they come due, and it will make it simpler for a tax attorney to give you good, useful advice, should you eventually need it.
Anyone having difficulty with figuring out what they owe in self-employment taxes in Avondale, Arizona should seek the help of a seasoned tax attorney. Most tax attorneys also have a good understanding of accounting, so making this determination probably won't be too hard for them. And on top of that, a qualified tax attorney can give you objective and useful legal advice, which can help prevent more significant issues from forming in the future.
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Life in AvondaleAvondale is very near Phoenix, Arizona, located in Maricopa County. It is very well noted for being home to the Phoenix International Raceway, a fun and famous auto-racing facility!
Being near Phoenix, Avondale residents have access to some very well-known law firms of all sizes. Phoenix is home to many large, mid-size, and small law firms that are home to many competent attorneys. Many of these attorneys have been educated at the top-tier University of Arizona Law School. Therefore, many lawyers working in Phoenix have a connection to Arizona and its residents. Avondale citizens can therefore enjoy personalized legal service from attorneys who care about their home.
Some famous residents of Avonda include Craig Mabbitt, Nick Harris, Clancy Pendergast, Raymond Shuey, and Everson Griffen.