Self Employment Tax in Gilbert, Arizona
In Gilbert, Arizona, there are specific taxes that are imposed on employees, which are deducted from their paychecks. The typically 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 important to note that if you are self-employed, you're still responsible 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 typically very simple, and any decent payroll software can automate this process. But the self-employed are liable for figuring this out for themselves, or hiring an accountant to do it.
Self-Employment tax obligations in Gilbert, Arizona
If you own a sole-proprietorship, or work primarily as an independent contractor, you need to pay the "self-employment tax" if you derive any substantial amount of income from self-employment. You must pay these taxes if your income from self-employment is more than $400 annually.
Persons who are not self-employed, and work for another person or company, have their contributions to Medicare and Social Security matched by their employers. This means that these programs are getting, on your behalf, twice as much money as what's deducted for your paycheck, with your employer covering the other half.
However, if you are self-employed in Gilbert, Arizona, you are responsible to pay both the employee and employer share of the employment tax. Essentially, 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 completely distinct from the income tax) is set at 15.3%, if your income from self-employment in Gilbert, Arizona exceeds $400. However, half of this tax is deducted from your income, for income tax purposes. Thus, 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 additional deductions for which you may be eligible. This means that, essentially, the self-employment tax rate is only 14%, as opposed to 15.3%
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Can a Gilbert, Arizona Tax Attorney Help?
If you work for yourself in Gilbert, you have to stay on top of your self-employment taxes, to avoid facing significant legal and financial issues later on. This means you need to keep reliable records of all your income and expenses, in case you need to seek the advice of a tax attorney: the more information you can provide your lawyer, the better he or she can help you.
If you have any difficulty calculating your self-employment tax liability, an efficient Gilbert, Arizona tax attorney would probably have very little trouble helping you figure it out. A knowledgeable lawyer can also give you practical legal advice, which can help you avoid more serious tax law issues in the future, by dealing with them before they become problematic.
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Life in Gilbert
Gilbert is a Maricopa County city that was ranked 24th safest city in the United States based on FBI crime statistics. Gilbert also maintains a top-notch school system that earned the title of 36th best place to live by GreatSchools.org. A large percent of Gilbert's 209,000 residents is comprised of families and young professionals, unsurprisingly. The rapidly growing high technology, renewable energy, and life sciences economy supports a wide range of high paying jobs. In fact, the average household income in Gilbert is $98,213 and over 1/3 of the adults hold higher than a bachelor's degree.
There are some very reputable lawyers living in Gilbert and know the local courts systems very well. Gilbert lawyers advise clients on a wide range of cases. Lawyers in Gilbert are knowledgeable of local courts so they'll be able to work with you to determine the best course of action for your case and with which court you should file you claim.
Gilbert is an attractive community for its plentiful amenities too. There are a number of shopping centers that serve the area of Gilbert as well as movie theaters and fun parks. Gilbert offers a number of public parks with picnic and barbeque accommodations. Bike paths and lanes make it easy for cyclists to safely travel throughout Gilbert. Josh Betley, professional BMX rider, lives in Gilbert.