Self Employment Tax in Providence, Rhode Island

Find the right Self Employment Tax attorney in Providence, RI

Self Employment Tax Lawyers in Providence

In the U.S., including in Providence, Rhode Island, taxes are placed on employees, which are normally deducted from their paychecks. The ones that most people are familiar with are the Medicare and Social Security taxes. The idea is that workers pay into these programs during their entire working lives, and then enjoy the benefits they provide once they retire.

It's crucial to note that if you are self-employed, you're still accountable for those taxes, and it's your responsibility to figure out what 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 Providence, Rhode Island

If you own a sole-proprietorship, or work primarily as an independent contractor, you need to pay the "self-employment tax" if you derive any considerable amount of income from self-employment. You must pay these taxes if your income from self-employment is more than annually.

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

However, if you are self-employed in Providence, Rhode Island, 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 Providence, Rhode Island, 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 additional 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%.

Can a Providence, Rhode Island Tax Attorney Help?

If you are self-employed in Providence, 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 effectively if you are able to quickly provide them with all the relevant information.

If you have any difficulty calculating your self-employment tax liability, an accomplished Providence, Rhode Island tax attorney would probably have very little trouble helping you figure it out. A brilliant lawyer can also give you practical legal advice, which can help you avoid more severe tax law issues in the future, by dealing with them before they become problematic.

Talk to a Tax Law Attorney now!

Life in Providence

Providence is the 3rd largest city in New England and known for its jewelry and silverware industry. Providence is known as the "Creative Capital" because the city and its residents emphasize educational and cultural resources within the community. Ivy League Brown University, Johnson Wales University, the Rhode Island School of Design, Providence College, the state's oldest public college named Rhode Island College are all located in Providence. The city is also home to one of the best writer's retreats available in the United States.

Since Providence is such an important community, a number of talented New England lawyers call it home. Providence lawyers are familiar with local Rhode Island State Courts, Providence County Courts, as well as Federal Courts like U.S. Immigration and Bankruptcy courts.

Other major industries in Providence include transportation and trade, education, health services, government, and leisure/hospitality services for tourists. Providence is a major East Coast hub for business and financial services as well.

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