Self Employment Tax in Salinas, California

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In Salinas, California, there are specific taxes that are enforced 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 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 precisely how much you owe, to confirm that you don't pay more or less than you are obliged to.

Typically, it's the employer who makes all these calculations, and the employee doesn't have to think about it. Most larger employers have payroll departments to oversee these matters, making it pretty simple for them. But, if you are self-employed, it's up to you to accurately determine what you have to pay in self-employment taxes

Self-Employment tax obligations in Salinas, California

If you are an independent contractor, or run a sole proprietorship (a company which you own, and which is not incorporated as a separate legal entity), you must pay the so-called "self-employment tax" if your income from self-employment is higher than $400 per year.

Employees in a regular employer/employee relationship do enjoy one substantial perk that the self-employed do not: their Social Security and Medicare contributions are matched by their employers. So, if you pay $100 in Social Security and Medicare taxes with every paycheck, your employer has to match that. This essentially doubles your contribution to these programs, without doubling their financial burden on you.

But, if you are self-employed in Salinas, California, 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 self-employment tax rate is 15.3% of all self-employment income, assuming your income from self-employment exceeds $400 per year in Salinas, California. But half of your self-employment tax liability can be deducted from your income tax. This results in a slightly reduced 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%.

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Can a Salinas, California Tax Attorney Help?

If you are self-employed in Salinas, 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 advise 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.

That said, if you are encountering trouble figuring out precisely how much self-employment tax you owe in Salinas, 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 requirement, a good tax attorney can give you the best possible chance of getting a favorable result.

8 Tax Law cases posted to LegalMatch lawyers in Salinas

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Life in Salinas

Salinas, California is a city in Monterey County. It is the county seat of that county, as well as its largest city. It has a population of over 150,000 people.

Salinas has a long and interesting history. It was first settled by humans as early as the year 200 AD, nearly 2,000 years ago. In the 1700s, Spanish Catholic missionaries settled the area, and Salinas soon became known as a major agricultural center, owing to its fertile soil and abundance of open space. When California became part of the United States in the mid-1800s, settlement by Americans from other parts of the country skyrocketed. 

Modernly, the economy of Salinas, California is heavily based on agriculture. Several large agribusiness firms are major employers in Salinas, CA. Unlike many American cities its size, the workforce of Salinas is still largely blue collar, with most of those workers employed in agriculture. Because the agriculture business is sometimes known for strained relations between workers and management, a large number of labor and employment lawyers from Salinas, CA have set up shop, representing both employers and employees. There are also many lawyers in Salinas who practice other areas of law. Many lawyers are drawn to Salinas, CA because of its quiet atmosphere and pleasant climate.

Needless to say, whatever legal issue you may be facing, there's probably a Salinas, California lawyer who can help you with it.  

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