Self Employment Tax Lawyers in Poplar Grove

In Poplar Grove, Illinois, some taxes are placed on employees, and deducted from their paychecks. Most people are aware of the Medicare and Social Security taxes - which fund those two programs by taking a small percentage of every paycheck an employee receives.

Individuals who are self-employed are still accountable for these taxes, and are responsible for figuring out how much they owe.

Most commonly, employers handle all of these calculations. With regular salaried and hourly employees, this is an easy process, and any decent payroll computer software can do it automatically. However, if you work for yourself, it is your responsibility to figure out clearly what you owe.

Self-Employment tax obligations in Poplar Grove, Illinois

If you derive even a small percentage of your income from running your own business, or working as an independent contractor, you have to pay the "self-employment tax." This tax applies to everyone who makes more than per year from self-employment.

Individuals 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 Poplar Grove, Illinois must make both the employee and employer contributions. Therefore, 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 Poplar Grove, Illinois. 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 Poplar Grove, Illinois Tax Attorney Help?

If you are self-employed in Poplar Grove, 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 Poplar Grove, Illinois 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.