Self Employment Tax Lawyers in Tyngsborough
In Tyngsborough, Massachusetts, some taxes are levied 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 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.
Usually, the employer makes all the necessary calculations and deductions from a person's paycheck. If you are self-employed, however, you are required to make this determination, and to ensure that it's accurate.
Self-Employment tax obligations in Tyngsborough, Massachusetts
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 everybody who makes more than per year from self-employment.
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.
But, if you are self-employed in Tyngsborough, Massachusetts, you are accountable to pay both the employee and employer share of the employment tax. Basically, this means that the employment tax for self-employed individuals is double what it would be for regular employees.
In Tyngsborough, Massachusetts, 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 Tyngsborough, Massachusetts Tax Attorney Help?
If you work for yourself in Tyngsborough, you have to stay on top of your self-employment taxes, to avoid facing severe legal and financial issues later on. This means you need to keep superb records of all your income and expenses, in case you need to seek the advice of a tax attorney: the more information you can provide your lawyer, the better he or she can help you.
That said, if you are encountering trouble figuring out clearly how much self-employment tax you owe in Tyngsborough, Massachusetts, a competent tax attorney shouldn't have any trouble helping you on that front. Likewise, if you end up in a dispute with the government over your self-employment tax requirement, a good tax attorney can give you the best possible chance of getting a favorable result.