Self Employment Tax Lawyers in Villa Park

In Villa Park, Illinois, some taxes are enforced on employees, and deducted from their paychecks. Most people are cognizant 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 responsible for these taxes, and are responsible for figuring out how much they owe.

Typically, 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 oversee 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 Villa Park, Illinois

If you own a sole-proprietorship, or work mainly as an independent contractor, you need to pay the "self-employment tax" if you derive any substantial amount of income from self-employment. You must pay these taxes if your income from self-employment is more than annually.

For usual employees, Social Security and Medicare payments are made in equal parts by the employee and employer. This essentially means that every employee's contribution to his or her future Medicare and Social Security benefits is matched by the employer.

However, if you are a self-employed business owner in Villa Park, Illinois, you are liable for both the employee and employer contributions to Medicare and Social Security. This essentially doubles your self-employment tax rate.

The total self-employment tax (note that this is totally distinct from the income tax) is set at 15.3%, if your income from self-employment in Villa Park, Illinois exceeds . But, half of this tax is deducted from your income, for income tax purposes. Thus, this means that, at most, the self-employed only have to pay income on 92% of their total income, and that amount may be lowered with further deductions for which you may be eligible. This means that, essentially, the self-employment tax rate is only 14%, as opposed to 15.3%

Can a Villa Park, Illinois Tax Attorney Help?

Self-employed individuals in Villa Park must ensure that they keep good, accurate 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 advise you with your legal tax concerns.

If you have any difficulty calculating your self-employment tax liability, an efficient Villa Park, Illinois tax attorney would likely have very little trouble assisting you figure it out. A reliable lawyer can also give you practical legal advice, which can help you avoid more significant tax law issues in the future, by dealing with them before they become problematic.