Self Employment Tax in Lake Forest, California

Find the Right Lawyer Now

In Lake Forest, California, there are certain taxes that are imposed 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 Lake Forest, California

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 everyone who makes more than $400 per year from self-employment.

Workers who are employed by someone else enjoy at least one perk that the self-employed do not: their employer matches their Social Security and Medicare contributions, effectively doubling the amount of money that's contributed to these funds on the employee's behalf.

But, if you are a self-employed business owner in Lake Forest, California, you are responsible for both the employee and employer contributions to Medicare and Social Security. This basically 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 Lake Forest, California. But half of your self-employment tax liability can be deducted from your income tax. This results in a slightly lower 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 Lake Forest Lawyer that Specializes in Your Area of Need:

Can a Lake Forest, California Tax Attorney Help?

If you are self-employed in Lake Forest, it's extremely important for you to be diligent in keeping records of your income and expenses, to ensure that you pay all the self-employment taxes that you owe (and also to make sure you don't over-pay). You may one day need a tax attorney to help you with a legal issue, and they can help you far more effectively if you are able to quickly provide them with all the relevant information.

Anyone having difficulty with figuring out what they owe in self-employment taxes in Lake Forest, California should seek the advice of a good tax attorney. Most tax attorneys also have a good knowledge of accounting, so making this determination probably won't be too hard for them. And on top of that, a competent tax attorney can give you objective and useful legal advice, which can help prevent more serious issues from arising in the future.

7 Tax Law cases posted to LegalMatch lawyers in Lake Forest

Self-Employment Tax Attorneys in the Largest CA Cities

Show California Cities

Self-Employment Tax Lawyers in Other California 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.

Tax Law Lawyer
LegalMatch Tax Law Lawyer Andrew D.

Andrew D.

TEHAMA, CA

Tax Law

Rating (2 users) *****
See Reviews
Tax Law Lawyer
LegalMatch Tax Law Lawyer Tax Defense N.

Tax Defense N.

Los Angeles West, CA

Tax Law

Rating (2 users) *****
See Reviews
Family Law Lawyer
LegalMatch Family Law Lawyer Peggy G.

Peggy G.

HENRY, GA

Family Law

Rating (1 users) *
See Reviews
Wills, Trusts and Estates Lawyer
LegalMatch Wills, Trusts and Estates Lawyer Peter V.

Peter V.

Los Angeles West, CA

Wills, Trusts and Estates

Rating (1 users) *****
See Reviews

Need a Lawyer?

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