Self Employment Tax in Dana Point, California

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In Dana Point, California, there are certain taxes that are placed 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 extremely important to know that, if you are self-employed, you still have to pay those taxes, and it's also up to you to figure out exactly how much you owe, to ensure that you don't pay more or less than you are required to.

Usually, it's the employer who does all the calculations, determining what deductions need to be made from a worker's paycheck to cover his or her tax liability. But if you are your own boss, you have to do this, and ensure that your figures are accurate.

Self-Employment tax obligations in Dana Point, California

If you primarily work as an independent contractor, or are the owner of a sole proprietorship, you have to pay what's typically referred to as the "self-employment tax," if your annual income from self-employment is over $400.

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.

But, self-employed workers in Dana Point, California must make both the employee and employer contributions. So, this means that the Medicare and Social Security tax liabilities apply doubly to the self-employed.

In Dana Point, California, self-employed business owners pay a self-employment tax rate of 15.3%. This is, of course, separate from, and additional to, whatever they pay in income tax. In an effort to partially offset this additional tax burden, half of what one pays in self-employment taxes can be deducted from their income when filing their income taxes. This means that the self employed pay income taxes on, at most, 92% of their income. And it's probably less, thanks to all the other deductions they might qualify for. This deduction lowers the effective self-employment tax rate to 14%, rather than the "official" rate of over 15%.

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Can a Dana Point, California Tax Attorney Help?

If you're self-employed in Dana Point, you need to keep thorough 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 easier for a tax attorney to give you good, useful advice, should you eventually need it.

That said, if you are having trouble figuring out exactly how much self-employment tax you owe in Dana Point, California, a competent tax attorney shouldn't have any trouble helping you on that front. Likewise, if you end up in a dispute with the government over your self-employment tax obligation, a good tax attorney can give you the best possible chance of getting a favorable result.

2 Tax Law cases posted to LegalMatch lawyers in Dana Point

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Life in Dana Point

Dana Point, California is situated in the southern area of Orange County, near the western coast.  It is known for its mild climate and warm temperatures, typical of a California coastal city.  Dana Point has a population of over 33,000 and is a favored location for surfing.  It was named after the Dana Point headlands.

Dana Point's city motto is, "Harboring the Good Life", which speaks of both its harbor culture and its laid-back atmosphere.  Popular places to visit include Dana Point Harbor, Salt Creek Beach Park, and Doheny State Beach Park.  These locations provide excellent locations for outdoor activities such as surfing, picnics, and beach sports.  In its early history, Dana Point, California has been described as "the only romantic spot on the coast".

It goes without saying that many of the events and attractions in Dana Point, California revolve around its beautiful beaches.  These include the "Festival of Whales" and the "Tall Ships Festival".  The annual Dana Point Grand Prix is a bike race winding through downtown and continuing on to some spectacular, breathtaking views.  Many of the beach areas also feature local shopping, fine seafood dining, and boutique shops.

Lawyers in Dana Point, California assist the community in a broad range of legal topics.  Some of the legal issues and laws in Dana Point may be specific to the area.  Experienced Dana Point lawyers can provide legal services that are tailored to meet the needs of city residents.

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