Self Employment Tax Lawyers in Lenexa

In Lenexa, Kansas, some taxes are enforced on employees, and deducted from their paychecks. Most people are cognizant of the Medicare and Social Security taxes - which fund those two programs by taking a small percentage of every paycheck an employee receives.

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.

Usually, the employer makes all the necessary calculations and deductions from a person's paycheck. If you are self-employed, however, you are required to make this determination, and to ensure that it's accurate.

Self-Employment tax obligations in Lenexa, Kansas

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

For people who are employed by another person or company, the employer normally matches the employee's contributions to Medicare and Social Security. This basically means that, when you look at your Medicare and Social Security tax statements on your paychecks, you can know that those programs are actually getting double what's shown there - with your employer covering the other half.

But, if you are self-employed in Lenexa, Kansas, 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.

Self-employed workers in Lenexa, Kansas pay a self-employment tax rate of 15.3% of their income that's derived from self-employment. But, half of whatever they end up paying in self-employment tax is deductible from income tax. This basically creates a tax deduction of nearly 8% of one's income, requiring you to only pay taxes on 92% of what you earn. Further tax deductions may lower that number further. When this deduction is taken into account, the self-employment tax rate is effectively 14%, as opposed to over 15%.

Can a Lenexa, Kansas Tax Attorney Help?

Self-employed individuals in Lenexa must ensure that they keep good, complete financial records. This makes it much easier to determine what you owe, and, if you need a tax attorney, it makes it easier for them to assist you with your legal tax contentions.

That said, if you are encountering trouble figuring out clearly how much self-employment tax you owe in Lenexa, Kansas, 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.