Self Employment Tax in San Ramon, California

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In San Ramon, California, there are particular taxes that are enforced 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 confirm that you don't pay more or less than you are obligated to.

Normally, 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 take 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 San Ramon, California

If you are an independent contractor, or run a sole proprietorship (a company which you own, and which is not incorporated as a separate legal entity), you must pay the so-called "self-employment tax" if your income from self-employment is larger than $400 per year.

Employees in a regular employer/employee relationship do enjoy one considerable 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 basically doubles your contribution to these programs, without doubling their financial burden on you.

But, if you're self employed in San Ramon, California, or anywhere else, you are obligated to make the employee AND employer contributions to Social Security and Medicare, basically doubling your employment tax liability.

The self-employment tax rate is 15.3% of all self-employment income, assuming your income from self-employment exceeds $400 per year in San Ramon, California. But half of your self-employment tax liability can be deducted from your income tax. This results in a slightly reduced 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 San Ramon, California Tax Attorney Help?

Self-employed individuals in San Ramon must ensure that they keep good, complete 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 assist you with your legal tax contentions.

Therefore, if you have some trouble figuring out what you owe in self-employment taxes, for whatever reason, chances are good that a reliable tax attorney in San Ramon, California can assist you with much trouble, and can provide you with good legal and financial advice, which can help you head off much more severe legal and financial issues.

9 Tax Law cases posted to LegalMatch lawyers in San Ramon

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Life in San Ramon

San Ramon, California is a city in Contra Costa County. Its population is currently about 72,000 people.

San Ramon, California is one of the larger suburbs in the San Francisco Bay Area, and it is one of the major employment hubs in the area. Several large companies have a major presence in San Ramon, California. Energy giant Chevron has its headquarters in San Ramon, where it employs 3,500 people, making it the largest employer in the city. AT&T has a major regional office there, as does the staffing company Robert Half, and the computer company IBM.

These large corporations employ a significant number of San Ramon, California lawyers.

If you are a resident of San Ramon, California and are in need of legal services, it's very likely that there's a San Ramon, California attorney who can help.

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