Self Employment Tax in Livermore, California

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In Livermore, California, there are particular taxes that are levied 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 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 clearly how much you owe, to confirm that you don't pay more or less than you are obligated to.

Normally, it's the employer who does all the calculations, deciding 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 confirm that your figures are accurate.

Self-Employment tax obligations in Livermore, 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 everybody who makes more than $400 per year from self-employment.

Individuals 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 receiving, on your behalf, twice as much money as what's deducted for your paycheck, with your employer covering the other half.

But, if you are self-employed in Livermore, California, 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.

In Livermore, 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 further 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 Livermore, California Tax Attorney Help?

If you are self-employed in Livermore, 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 assist you with a legal issue, and they can help you far more efficiently if you are able to quickly present them with all the relevant information.

With all that said, if you are having difficulty deciding just how much money you owe in Medicare and Social Security taxes from self-employment in Livermore, California, and keep good financial records, it should be relatively easy for a decent tax attorney to help you. And, if you end up facing a more severe legal issue over your self-employment tax liability, a tax attorney may prove to be invaluable.

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Life in Livermore

Livermore, California is a city in Alameda County. Its population is about 81,000 people. Livermore is located in the Eastern outskirts of the San Francisco Bay Area, and is generally considered to be on the border between the Bay Area and Central Valley.

Livermore, California's history of human habitation dates back several thousand years, with the Ohlone tribe of Native Americans inhabiting the area for centuries before the arrival of Europeans. The first European settlements of the Livermore area arrived in the 1770s, when the Spanish established a strong military and missionary presence in the area. After the discovery of gold in California, Livermore became a popular "first day" stopping point for prospectors arriving via San Francisco. 

Modernly, Livermore, California is home of the Lawrence Livermore National Laboratory, which, in association with the University of California system and the Department of Energy, carries out cutting-edge scientific research, particularly in the area of nuclear energy.

This facility, besides employing large numbers of engineers and scientists, also employ several attorneys who handle things like employee relations and intellectual property.

If you need a lawyer in Livermore, California, for whatever reason, it's very likely that there's a Livermore, California attorney who can help you with whatever legal problems you might be facing.

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