Self Employment Tax in Fullerton, California
In Fullerton, California, there are specific taxes that are levied 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 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 confirm that you don't pay more or less than you are obliged to.
Typically, it's the employer who does all the calculations, deciding 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 confirm that your figures are accurate.
Self-Employment tax obligations in Fullerton, California
If you mainly work as an independent contractor, or are the owner of a sole proprietorship, you have to pay what's regularly referred to as the "self-employment tax," if your annual income from self-employment is over $400.
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 are self-employed in Fullerton, California, you are responsible to pay both the employee and employer share of the employment tax. Essentially, this means that the employment tax for self-employed individuals is double what it would be for regular employees.
Self-employed workers in Fullerton, California 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 Fullerton Lawyer that Specializes in Your Area of Need:
Can a Fullerton, California Tax Attorney Help?
If you are self-employed in Fullerton, 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 efficiently if you are able to quickly present them with all the relevant information.
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 Fullerton, California, 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.
7 Tax Law cases posted to LegalMatch lawyers in Fullerton
Self-Employment Tax Attorneys in the Largest CA Cities
Life in FullertonFullerton is located in the northern parts of Orange County, California. The city is named after George H. Fullerton, who originally secured the plot of land where the city is now situated. Fullerton, California is home to several employers and educational institutions such as California State University, Fullerton (CSUF).
Downtown Fullerton is a veritable cornucopia of entertainment with its mix of cantina-style eateries, local pubs, and jazz bars. The city of Fullerton, California is associated with the alternative rock music scene, as it is considered a cultural hub for that particular genre of music. Gwen Stefani, lead singer of the music group "No Doubt", attended CSUF, and the band has performed many shows in Fullerton.
Adding to the culture's rich cultural make-up is its equally impressive role in the history of music. Leo Fender, founder of Fender Musical Instrument Company, was born and raised in the city. He started his company in Fullerton, and the Fender factory produced some of the world's most innovative electric guitars.
Fullerton thus became known as a trend-setter in the music and entertainment scene. With its bustling night life and close proximity to Los Angeles, Fullerton is a major contributor to the economic and cultural vitality of California.
Lawyers in Fullerton, California contribute to the city's progress by providing a number of valuable legal services for residents. Fullerton lawyers typically process legal claims at the Superior Court of California, Orange County.