Self Employment Tax Lawyers in Caruthersville
In Caruthersville, Missouri, 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.
But what if you're self-employed? You're still obligated to pay these taxes, since you will also be qualified for those retirement programs. It's also your responsibility to determine what your tax liability is.
Normally, 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 take 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 Caruthersville, Missouri
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 considerable amount of income from self-employment. You must pay these taxes if your income from self-employment is more than annually.
For normal employees, Social Security and Medicare payments are made in equal parts by the employee and employer. This basically means that every employee's contribution to his or her future Medicare and Social Security benefits is matched by the employer.
But, the self-employed in Caruthersville, Missouri are responsible for making the employer AND employee contributions to those programs, basically doubling what they would have to pay if they were employed by someone else.
Self-employed workers in Caruthersville, Missouri pay a self-employment tax rate of 15.3% of their income that's derived from self-employment. But, half of whatever they end up paying in self-employment tax is deductible from income tax. This basically creates a tax deduction of nearly 8% of one's income, requiring you to only pay taxes on 92% of what you earn. Further tax deductions may lower that number further. When this deduction is taken into account, the self-employment tax rate is effectively 14%, as opposed to over 15%.
Can a Caruthersville, Missouri Tax Attorney Help?
If you are self-employed in Caruthersville, 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 efficiently if you are able to quickly present them with all the relevant information.
Anyone having difficulty with figuring out what they owe in self-employment taxes in Caruthersville, Missouri should seek the help of a seasoned 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 significant issues from forming in the future.