Self Employment Tax in Sylacauga, Alabama

Find the Right Lawyer Now

In Sylacauga, Alabama, 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 critical to note that if you are self-employed, you're still responsible for those taxes, and it's your responsibility to figure out what you owe.

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 Sylacauga, Alabama

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 $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're self employed in Sylacauga, Alabama, or anywhere else, you are obliged to make the employee AND employer contributions to Social Security and Medicare, essentially doubling your employment tax liability.

Self-employed workers in Sylacauga, Alabama 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 essentially 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%.

Find a Sylacauga Lawyer that Specializes in Your Area of Need:

Can a Sylacauga, Alabama Tax Attorney Help?

Self-employed individuals in Sylacauga must ensure that they keep good, accurate 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 advise you with your legal tax concerns.

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 Sylacauga, Alabama, 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.

1 Tax Law cases posted to LegalMatch lawyers in Sylacauga

Self-Employment Tax Attorneys in the Largest AL Cities

Show Alabama Cities

Self-Employment Tax Lawyers in Other Alabama Cities and Towns


Find the Right Lawyer Now

Top Rated Lawyers

View attorney profiles and see how other LegalMatch users rate attorneys that may respond to your case.

Tax Law Lawyer
LegalMatch Tax Law Lawyer Tax Defense N.

Tax Defense N.

Los Angeles West, AL

Tax Law

Rating (2 users) *****
See Reviews
Tax Law Lawyer
LegalMatch Tax Law Lawyer Michael W.

Michael W.

Los Angeles West, AL

Tax Law

Rating (2 users) ***
See Reviews
Bankruptcy, Banking and Credit Lawyer
LegalMatch Bankruptcy, Banking and Credit Lawyer Karl N.

Karl N.

Ocean, NJ

Bankruptcy, Banking and Credit

Rating (3 users) ****
See Reviews
Wills, Trusts and Estates Lawyer
LegalMatch Wills, Trusts and Estates Lawyer Kenneth W.

Kenneth W.

Suffolk, NY

Wills, Trusts and Estates

Rating (9 users) ****
See Reviews

Need a Lawyer?

No obligation - Lawyers compete for your case. Choose your issue & get started now: