Self Employment Tax Lawyers in Mountain Grove
In Mountain Grove, Missouri, a few different taxes are placed on employees, and subtracted from their gross pay during each pay period. The examples that most people are familiar with are the taxes imposed to fund Medicare and Social Security, which get their funding mostly from these relatively small pay deductions.
Individuals who are self-employed are still liable for these taxes, and are responsible for figuring out how much they owe.
Usually, it's the employer who does all the calculations, determining what deductions need to be made from a worker's paycheck to cover his or her tax liability. But if you are your own boss, you have to do this, and ensure that your figures are accurate.
Self-Employment tax obligations in Mountain Grove, Missouri
If you primarily work as an independent contractor, or are the owner of a sole proprietorship, you have to pay what's typically referred to as the "self-employment tax," if your annual income from self-employment is over .
Employees in a regular employer/employee relationship do enjoy one significant 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 effectively doubles your contribution to these programs, without doubling their financial burden on you.
But, self-employed workers in Mountain Grove, Missouri must make both the employee and employer contributions. So, 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 Mountain Grove, Missouri exceeds . However, half of this tax is deducted from your income, for income tax purposes. So, 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, effectively, the self-employment tax rate is only 14%, as opposed to 15.3%
Can a Mountain Grove, Missouri Tax Attorney Help?
If you are self-employed in Mountain Grove, 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.
With all that said, if you are having difficulty determining just how much money you owe in Medicare and Social Security taxes from self-employment in Mountain Grove, Missouri, and keep good financial records, it should be relatively easy for a decent tax attorney to help you. And, if you end up facing a more serious legal issue over your self-employment tax liability, a tax attorney may prove to be invaluable.