Self Employment Tax Lawyers in Flushing
In Flushing, Michigan, 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.
It's imperativel 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 precisely how much you owe.
In most cases, employers make all the necessary calculations to determine how much needs to be deducted from an employee's check to pay these taxes. It's typically very simple, and any decent payroll software can automate this process. But the self-employed are liable for figuring this out for themselves, or hiring an accountant to do it.
Self-Employment tax obligations in Flushing, Michigan
If you own a sole-proprietorship, or work primarily 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.
Persons 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 Flushing, Michigan must make both the employee and employer contributions. Thus, this means that the Medicare and Social Security tax liabilities apply doubly to the self-employed.
The total self-employment tax (note that this is completely distinct from the income tax) is set at 15.3%, if your income from self-employment in Flushing, Michigan exceeds . However, 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 additional 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 Flushing, Michigan Tax Attorney Help?
Self-employed individuals in Flushing 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.
That said, if you are having trouble figuring out precisely how much self-employment tax you owe in Flushing, Michigan, 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 obligation, a good tax attorney can give you the best possible chance of getting a favorable result.