Self Employment Tax Lawyers in Rocky Hill

In Rocky Hill, Connecticut, 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 necessaryl to be aware of one fact: if you're self-employed, you still have to pay these taxes. And it's your responsibility (or the responsibility of someone you hire for this purpose) to figure out clearly how much you owe.

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 Rocky Hill, Connecticut

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 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 Rocky Hill, Connecticut 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 per year in Rocky Hill, Connecticut. 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%.

Can a Rocky Hill, Connecticut Tax Attorney Help?

If you are self-employed in Rocky Hill, 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 assist 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 Rocky Hill, Connecticut should seek the help of a brilliant tax attorney. Most tax attorneys also have a good understanding of accounting, so making this determination probably won't be too hard for them. And on top of that, a qualified tax attorney can give you objective and useful legal advice, which can help prevent more severe issues from forming in the future.