Self Employment Tax in Cabot, Arkansas

Find the Right Lawyer Now

In Cabot, Arkansas, there are specific taxes that are placed 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 crucial 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 Cabot, Arkansas

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 substantial amount of income from self-employment. You must pay these taxes if your income from self-employment is more than $400 annually.

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.

However, the self-employed in Cabot, Arkansas are responsible for making the employer AND employee contributions to those programs, essentially doubling what they would have to pay if they were employed by someone else.

Self-employed workers in Cabot, Arkansas pay a self-employment tax rate of 15.3% of their income that's derived from self-employment. However, 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. Additional 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 Cabot Lawyer that Specializes in Your Area of Need:

Can a Cabot, Arkansas Tax Attorney Help?

If you are self-employed in Cabot, 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 Cabot, Arkansas, 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.

Self-Employment Tax Attorneys in the Largest AR Cities

Show Arkansas Cities

Self-Employment Tax Lawyers in Other Arkansas 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, AR

Tax Law

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

Michael W.

Los Angeles West, AR

Tax Law

Rating (2 users) ***
See Reviews
Family Law Lawyer
LegalMatch Family Law Lawyer Laurie G.

Laurie G.

Hamilton, OH

Family Law

Rating (1 users) *****
See Reviews
Family Law Lawyer
LegalMatch Family Law Lawyer Joseph B.

Joseph B.

Morgan, UT

Family Law

Rating (2 users) *****
See Reviews

Need a Lawyer?

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