Self Employment Tax in Austin, Texas

Find the right Self Employment Tax attorney in Austin, TX

Self Employment Tax Lawyers in Austin

In the U.S., including in Austin, Texas, taxes are placed on employees, which are typically 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 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 ensure that you don't pay more or less than you are obliged to.

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 typically very simple, and any decent payroll software can automate this process. But the self-employed are liable for figuring this out for themselves, or hiring an accountant to do it.

Self-Employment tax obligations in Austin, Texas

If you work as an independent contractor, or operate a sole proprietorship, you are deemed to be "self employed." You are obliged 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 typically matches the employee's contributions to Medicare and Social Security. This essentially 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 a self-employed business owner in Austin, Texas, you are liable for both the employee and employer contributions to Medicare and Social Security. This basically 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 Austin, Texas. However, 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 Austin, Texas Tax Attorney Help?

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

With all that said, if you are having difficulty determining just how much money you owe in Medicare and Social Security taxes from self-employment in Austin, Texas, 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 significant legal issue over your self-employment tax liability, a tax attorney may prove to be invaluable.

Talk to a Tax Law Attorney now!

Life in Austin

Austin, Texas is known as one of the best cities in Texas because there is a lot to do! Austin is the fourth largest city in Texas with a population of about 790,390. Also known for being the thirty-fifth largest metropolitan area in the United States, Austin has attractions for tourists of all types.

Popular attractions include Congress Avenue, Zilker Metropolitan Park, State Capital, Austin Nature Science Center, Mount Bonnell, Texas Military Forces Museum, Fall Creek Vineyards and Paramount Theatre. In all honestly, pages and pages could be written about the attractions in Austin. One really needs to go there to experience all the attractions and active vibe of the city. Austin is also home to many large multinational, international, mid-size, and small law firms. What does this mean? This means that any Austin resident and/or businesses have a large number of firms to choose from when seeking competent attorneys or law firms. This is a rare offering that not all metropolitan cities offer. Overall, from quality of life to industry, Austin is a great choice for visiting or living!

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