Self Employment Tax Lawyers in Dellwood

In Dellwood, Missouri, some taxes are imposed 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.

But what if you're self-employed? You're still obliged to pay these taxes, since you will also be eligible for those retirement programs. It's also your responsibility to determine what your tax liability is.

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 Dellwood, Missouri

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.

Employees in a regular employer/employee relationship do enjoy one substantial perk that the self-employed do not: their Social Security and Medicare contributions are matched by their employers. So, if you pay in Social Security and Medicare taxes with every paycheck, your employer has to match that. This essentially doubles your contribution to these programs, without doubling their financial burden on you.

However, if you are self-employed in Dellwood, Missouri, you are responsible to pay both the employee and employer share of the employment tax. Essentially, this means that the employment tax for self-employed individuals is double what it would be for regular employees.

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 Dellwood, Missouri 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 Dellwood, Missouri Tax Attorney Help?

Self-employed individuals in Dellwood 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 Dellwood, Missouri, 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.