Self Employment Tax Lawyers in Clinton
In Clinton, North Carolina, 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 responsible for these taxes, and are responsible for figuring out how much they 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 Clinton, North Carolina
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 .
For people who are employed by another person or company, the employer typically matches the employee's contributions to Medicare and Social Security. This essentially means that, when you look at your Medicare and Social Security tax statements on your paychecks, you can know that those programs are actually getting double what's shown there - with your employer covering the other half.
However, if you are self-employed in Clinton, North Carolina, 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 Clinton, North Carolina 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 Clinton, North Carolina Tax Attorney Help?
Self-employed individuals in Clinton 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.
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 Clinton, North Carolina, 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 significant legal issue over your self-employment tax liability, a tax attorney may prove to be invaluable.