Self Employment Tax in Brentwood, California

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In Brentwood, California, there are particular taxes that are placed on employees, which are deducted from their paychecks. The generally 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 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 clearly how much you owe, to ensure that you don't pay more or less than you are obligated to.

Normally, it's the employer who does all the calculations, determining what deductions need to be made from a worker's paycheck to cover his or her tax liability. But if you are your own boss, you have to do this, and ensure that your figures are accurate.

Self-Employment tax obligations in Brentwood, California

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 $400 per year.

Workers who are employed by someone else enjoy at least one perk that the self-employed do not: their employer matches their Social Security and Medicare contributions, basically doubling the amount of money that's contributed to these funds on the employee's behalf.

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

The self-employment tax rate is 15.3% of all self-employment income, assuming your income from self-employment exceeds $400 per year in Brentwood, California. But half of your self-employment tax liability can be deducted from your income tax. This results in a slightly lower income tax bill, which partially offsets this additional tax burden. It essentially means that the self-employment tax only applies to 92% of your income, as opposed to all of it. This means that your effective self-employment tax rate is about 14%, as opposed to over 15%.

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Can a Brentwood, California Tax Attorney Help?

If you're self-employed in Brentwood, you need to keep complete records of all your income and expenses from the operation of your business. This will make it much easier for you to calculate your taxes when they come due, and it will make it easier for a tax attorney to give you good, useful advice, should you eventually need it.

That said, if you are having trouble figuring out clearly how much self-employment tax you owe in Brentwood, California, a competent tax attorney shouldn't have any trouble helping you on that front. Likewise, if you end up in a dispute with the government over your self-employment tax obligation, a good tax attorney can give you the best possible chance of getting a favorable result.

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Life in Brentwood

Brentwood, California is a city in Contra Costa County, California, in the East Bay region of the San Francisco Bay Area. Its population is a little over 51,000 people.

Brentwood, California's economy has evolved over the last several decades, transitioning from a mostly agriculture based economy, to one based on retail and services. Uniquely, however,  Brentwood has retained agriculture as a significant portion of its economic base, creating a diverse and vibrant economy, with a median household income of over $80,000.

Many extremely successful professionals call Brentwood, California home. These include many lawyers and other providers of legal services. 

Brentwood, California lawyers are highly competent, and are able to handle almost any legal issue just about any legal issue that their clients will face. 

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