Self Employment Tax Lawyers in Lewiston

In Lewiston, Maine, 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 necessaryl to be aware of one fact: if you're self-employed, you still have to pay these taxes. And it's your responsibility (or the responsibility of someone you hire for this purpose) to figure out clearly how much you owe.

In most cases, employers make all the necessary calculations to determine how much needs to be deducted from an employee's check to pay these taxes. It's normally very simple, and any decent payroll software can automate this process. But the self-employed are accountable for figuring this out for themselves, or hiring an accountant to do it.

Self-Employment tax obligations in Lewiston, Maine

If you work as an independent contractor, or operate a sole proprietorship, you are deemed to be "self employed." You are required to pay the self-employment tax if your total income from self-employment exceeds per year.

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.

However, if you are a self-employed business owner in Lewiston, Maine, you are accountable for both the employee and employer contributions to Medicare and Social Security. This essentially doubles your self-employment tax rate.

Currently, the self-employment tax rate in the United States is 15.30% of all income earned from self-employment in Lewiston, Maine. Nonetheless, half of your hypothetical self-employment tax liability can be deducted from your income. This means that you only pay self-employment tax on about 92% of your income, which creates an effective self-employment tax rate of just over 14%.

Can a Lewiston, Maine Tax Attorney Help?

If you are self-employed in Lewiston, 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 Lewiston, Maine, 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.