Self Employment Tax Lawyers in Burlingame
In Burlingame, California, there are certain taxes that are placed on employees, which are deducted from their paychecks. The mostly 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 exactly how much you owe, to ensure that you don't pay more or less than you are required to.
Usually, 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 Burlingame, California
If you work as an independent contractor, or operate a sole proprietorship, you are deemed to be "self employed." You are obligated to pay the self-employment tax if your total income from self-employment exceeds per year.
People 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.
But, self-employed workers in Burlingame, California must make both the employee and employer contributions. So, this means that the Medicare and Social Security tax liabilities apply doubly to the self-employed.
Currently, the self-employment tax rate in the United States is 15.30% of all income earned from self-employment in Burlingame, California. 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 Burlingame, California Tax Attorney Help?
If you are self-employed in Burlingame, 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 help 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.
Anyone having difficulty with figuring out what they owe in self-employment taxes in Burlingame, California should seek the advice of a good tax attorney. Most tax attorneys also have a good knowledge of accounting, so making this determination probably won't be too hard for them. And on top of that, a competent tax attorney can give you objective and useful legal advice, which can help prevent more severe issues from arising in the future.