Self Employment Tax Lawyers in Campbellsville

In Campbellsville, Kentucky, 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.

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 exactly how much you owe, to confirm that you don't pay more or less than you are required to.

Usually, 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 handle 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 Campbellsville, Kentucky

If you work as an independent contractor, or operate a sole proprietorship, you are deemed to be "self employed." You are obligated to pay the self-employment tax if your total income from self-employment exceeds per year.

For people who are employed by another person or company, the employer usually matches the employee's contributions to Medicare and Social Security. This effectively means that, when you look at your Medicare and Social Security tax statements on your paychecks, you can know that those programs are actually getting double what's shown there - with your employer covering the other half.

But, if you're self employed in Campbellsville, Kentucky, or anywhere else, you are required to make the employee AND employer contributions to Social Security and Medicare, effectively doubling your employment tax liability.

In Campbellsville, Kentucky, self-employed business owners pay a self-employment tax rate of 15.3%. This is, of course, separate from, and additional to, whatever they pay in income tax. In an effort to partially offset this further tax burden, half of what one pays in self-employment taxes can be deducted from their income when filing their income taxes. This means that the self employed pay income taxes on, at most, 92% of their income. And it's probably less, thanks to all the other deductions they might qualify for. This deduction lowers the effective self-employment tax rate to 14%, rather than the "official" rate of over 15%.

Can a Campbellsville, Kentucky Tax Attorney Help?

If you are self-employed in Campbellsville, it's essential that you keep good records of your income and expenses, because a tax attorney will only be able to help you to the extent that you help yourself.

So, if you have some trouble figuring out what you owe in self-employment taxes, for whatever reason, chances are good that a qualified tax attorney in Campbellsville, Kentucky can help you with much trouble, and can provide you with good legal and financial advice, which can help you head off much more serious legal and financial issues.